Why BigCommerce (BIGC) Shares Are Trading Lower Today

Petr Huřťák /
2024/02/05 3:37 pm EST

What Happened:

Shares of e-commerce software platform provider BigCommerce (NASDAQ: BIGC) fell 5.9% in the morning session after Goldman Sachs analyst Gabriela Borges downgraded the stock's rating from Buy to Neutral, highlighting possible challenges as the company tries to gain market share in the mid-market segment. The firm added, "BigCommerce needs to continue investing in both product functionality and go-to-market, and as Shopify has made steady progress with its momentum into the enterprise segment via Shopify Plus."

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy BigCommerce? Access our full analysis report here, it's free.

What is the market telling us:

BigCommerce's shares are very volatile and over the last year have had 33 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 5 days ago, when the company dropped 5% as stocks retreated after the Federal Open Market Committee kept rates steady at 5.25% - 5.5% during the first policy meeting for 2024, in line with expectations. Fed Chair Jerome Powell also signaled no rate cuts during the next policy meeting in March 2024. He added, "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%." This threw some cold water on a market that has been strong over the last 6 months as investors have priced in rate cuts. However, rate cuts beyond March are still very much on the table so long as inflation doesn't get out of control and unexpectedly accelerate from current levels.

BigCommerce is down 10.7% since the beginning of the year, and at $8.03 per share it is trading 33.6% below its 52-week high of $12.10 from February 2023. Investors who bought $1,000 worth of BigCommerce's shares at the IPO in August 2020 would now be looking at an investment worth $111.18.

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