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E-commerce Software Stocks Q2 Teardown: Wix (NASDAQ:WIX) Vs The Rest


Petr Huřťák /
2022/10/04 3:40 am EDT
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As we reflect back on the just completed Q2 e-commerce software sector earnings season, we dig into the relative performance of Wix (NASDAQ:WIX) and its peers.

While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.

The 5 e-commerce software stocks we track reported a weak Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 2.41% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows , but e-commerce software stocks held their ground better than others, with the share prices up 1.46% since the previous earnings results, on average.

Wix (NASDAQ:WIX)

Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.

Wix reported revenues of $345.2 million, up 9.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and slow revenue growth.

"We are pleased with our fundamental business improvement this quarter as Wix continues to be the go-to platform for any type of user and any type of business globally," said Avishai Abrahami, Wix Co-founder and CEO.

Wix Total Revenue

The stock is up 15% since the results and currently trades at $79.10.

Read our full report on Wix here, it's free.

Best Q2: BigCommerce (NASDAQ:BIGC)

Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) provides software for businesses to easily create online stores.

BigCommerce reported revenues of $68.2 million, up 39.1% year on year, beating analyst expectations by 3.08%. It was a mixed quarter for the company, with exceptional revenue growth but an underwhelming revenue guidance for the next quarter.

BigCommerce Total Revenue

BigCommerce achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is down 16.6% since the results and currently trades at $15.32.

Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.

Weakest Q2: Shopify (NYSE:SHOP)

Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses.

Shopify reported revenues of $1.29 billion, up 15.6% year on year, missing analyst expectations by 2.67%. It was a weak quarter for the company, with a miss of the top line analyst estimates and slow revenue growth.

Shopify had the weakest performance against analyst estimates in the group. The stock is down 3.17% since the results and currently trades at $27.36.

Read our full analysis of Shopify's results here.

GoDaddy (NYSE:GDDY)

Founded by Bob Parsons after selling his first company to Intuit, GoDaddy (NYSE:GDDY) provides small and mid-sized businesses with the ability to buy a web domain and tools to create and manage a website.

GoDaddy reported revenues of $1.01 billion, up 9.04% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and full year missing analysts' expectations.

The stock is down 4.31% since the results and currently trades at $72.31.

Read our full, actionable report on GoDaddy here, it's free.

Squarespace (NYSE:SQSP)

Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.

Squarespace reported revenues of $212.7 million, up 8.51% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full year.

Squarespace had the slowest revenue growth and weakest full year guidance update among the peers. The stock is up 14.8% since the results and currently trades at $22.87.

Read our full, actionable report on Squarespace here, it's free.

The author has no position in any of the stocks mentioned