Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Olo (NYSE:OLO), and the best and worst performers in the e-commerce software group.
While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of the retail industry 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 susceptible to online disruption. There are still large areas of the retail market where e-commerce has not broken through and that drives the demand for various e-commerce software solutions.
The 4 e-commerce software stocks we track reported a a decent Q2; on average, revenues beat analyst consensus estimates by 3.11%, while on average next quarter revenue guidance was 2.78% above consensus. On average the share price was down 11.7% the day after the earnings.
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Olo reported revenues of $35.8 million, up 47.6% year on year, beating analyst expectations by 5.03%. It was a strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
“The second quarter was another strong quarter of profitable growth for Olo. Restaurant digital sales proved durable during the second quarter, demonstrating that the restaurant industry’s digital transformation is not just about delivery but all ordering modes. We are excited that Olo’s platform is enabling restaurant brands to digitize every transaction, not just delivery transactions,” said Noah Glass, Olo’s Founder and CEO.
Olo pulled off the strongest analyst estimates beat and fastest revenue growth of the whole group. But with the valuations so high investors wanted to see even more and the stock is down 22.9% since the results and currently trades at $28.85.
Best Q2: BigCommerce (NASDAQ:BIGC)
Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce provides software for businesses to easily create online stores.
BigCommerce reported revenues of $49 million, up 34.9% year on year, beating analyst expectations by 4.71%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter and a full year guidance beating analysts' expectations.
BigCommerce delivered the highest full year guidance raise among its peers. The company added 477 enterprise customers paying more than $2,000 annually to a total of 10,986. The stock is down 26.3% since the results and currently trades at $52.52.
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Weakest Q2: Wix (NASDAQ:WIX)
Founded in 2006 in Tel Aviv, Wix.com offers a free and easy to operate website building platform.
Wix reported revenues of $316.4 million, up 34% year on year, beating analyst expectations by 1.52%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations and an underwhelming full year guidance.
Wix had the weakest full year guidance update in the group. The stock is down 27.1% since the results and currently trades at $189.
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 $931.3 million, up 15.4% year on year, beating analyst expectations by 1.19%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
GoDaddy had the weakest performance against analyst estimates and slowest revenue growth among the peers. The stock is down 16.3% since the results and currently trades at $69.85.
The author has no position in any of the stocks mentioned