The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how GoDaddy (NYSE:GDDY) and the rest of the e-commerce software stocks fared in Q3.
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 slower Q3; on average, revenues beat analyst consensus estimates by 1.49%, while on average next quarter revenue guidance was 1.93% 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 14.7% since the previous earnings results, on average.
Weakest Q3: 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 $1.03 billion, up 7.17% year on year, missing analyst expectations by 0.33%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.
"GoDaddy delivered solid results in the third quarter despite macroeconomic headwinds and foreign exchange rate pressure," said GoDaddy CEO Aman Bhutani.
GoDaddy delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is up 11.3% since the results and currently trades at $80.96.
Read our full report on GoDaddy here, it's free.
Best Q3: 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 $1.36 billion, up 21.5% year on year, beating analyst expectations by 2.27%. It was a strong quarter for the company, with a decent beat of analyst estimates.
The stock is up 42.7% since the results and currently trades at $41.56.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.
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 $217.6 million, up 8.32% 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 slow revenue growth.
Squarespace had the weakest full year guidance update in the group. The stock is up 13.3% since the results and currently trades at $22.26.
Read our full analysis of Squarespace's results here.
Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.
Wix reported revenues of $345.8 million, up 7.79% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in gross margin but slow revenue growth.
The stock is up 22.7% since the results and currently trades at $85.32.
Read our full, actionable report on Wix here, it's free.
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 $72.3 million, up 22.1% year on year, beating analyst expectations by 3.97%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter.
BigCommerce pulled off the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among the peers. The stock is down 16.6% since the results and currently trades at $11.04.
Read our full, actionable report on BigCommerce here, it's free.
The author has no position in any of the stocks mentioned