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Winners And Losers Of Q4: Squarespace (NYSE:SQSP) Vs The Rest Of The E-commerce Software Stocks


Jabin Bastian /
2022/03/25 7:02 am EDT
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q4 now behind us, let’s have a look at Squarespace (NYSE:SQSP) 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 4 e-commerce software stocks we track reported a weak Q4; on average, revenues beat analyst consensus estimates by 2.27%, while on average next quarter revenue guidance was 2.41% under consensus. The technology sell-off has been putting pressure on stocks since November, but e-commerce software stocks held their ground better than others, with share price down 0.28% since earnings, on average.

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 $207.4 million, up 20.3% year on year, in line with analyst expectations. It was a mixed quarter for the company, with the guidance for both the next quarter and the full year below analyst estimates.

"2021 was an incredible year for Squarespace that exceeded our guidance, as we delivered record revenue and total unique subscriptions," said Anthony Casalena, Founder and CEO of Squarespace.

Squarespace Total Revenue

Squarespace delivered the weakest full year guidance update of the whole group. The stock is up 16.4% since the results and currently trades at $26.44.

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

Fastest Growth: 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 $64.8 million, up 50.4% year on year, beating analyst expectations by 4.96%. It was a mixed quarter for the company, with a strong increase in revenue but an underwhelming guidance for the next year and decelerating growth in large customers.

BigCommerce Total Revenue

BigCommerce achieved the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 376 enterprise customers paying more than $2,000 annually to a total of 12,754. The stock is down 16.7% since the results and currently trades at $21.56.

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

Weakest Q4: 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 $328.3 million, up 16.2% year on year, missing analyst expectations by 1.34%. It was a weak quarter for the company, with a miss of the top line analyst estimates and an underwhelming revenue guidance for the next quarter.

Wix had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 13.7% since the results and currently trades at $99.84.

Read our full analysis of Wix'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 16.6% year on year, beating analyst expectations by 4.74%. It was a weaker quarter for the company, with the guidance for both the next quarter and the full year below analyst estimates.

The stock is up 12.9% since the results and currently trades at $83.80.

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

The author has no position in any of the stocks mentioned