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Unpacking Q4 Earnings: GoDaddy (NYSE:GDDY) In The Context Of Other E-commerce Software Stocks


Anthony Lee /
2023/04/11 5:33 am EDT
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Looking back on e-commerce software stocks' Q4 earnings, we examine this quarter's best and worst performers, including GoDaddy (NYSE:GDDY) 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 6 e-commerce software stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 1.38%, while on average next quarter revenue guidance was 0.52% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but e-commerce software stocks held their ground better than others, with the share prices up 0.82% since the previous earnings results, on average.

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 $1.04 billion, up 2.02% year on year, missing analyst expectations by 0.31%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.

"GoDaddy achieved strong revenue and cash flow growth in 2022, despite macroeconomic headwinds," said GoDaddy CEO Aman Bhutani.

GoDaddy Total Revenue

GoDaddy delivered the slowest revenue growth of the whole group. The stock is down 5.59% since the results and currently trades at $76.51.

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

Best Q4: 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 $1.73 billion, up 25.7% year on year, beating analyst expectations by 5.11%. It was a very good quarter for the company, with a solid beat of analyst estimates and solid revenue growth.

Shopify Total Revenue

Shopify delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 15.3% since the results and currently trades at $45.22.

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

Weakest Q4: 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 $72.4 million, up 11.6% year on year, missing analyst expectations by 1.24%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.

BigCommerce had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 26.8% since the results and currently trades at $8.3.

Read our full analysis of BigCommerce's results here.

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 $228.8 million, up 10.3% year on year, beating analyst expectations by 2.99%. It was a solid quarter for the company, with very strong guidance for the next year.

Squarespace achieved the highest full year guidance raise among the peers. The stock is up 34.5% since the results and currently trades at $32.33.

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

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 $355 million, up 8.13% year on year, in line with analyst expectations. It was a decent quarter for the company, with very strong guidance for the next year but slow revenue growth.

The stock is up 15.6% since the results and currently trades at $93.41.

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

The author has no position in any of the stocks mentioned