SHOP - BigCommerce: Solid Value Proposition But Revenue Growth Slowing (Rating Downgrade)
2024-06-05 09:28:21 ET
Summary
- BigCommerce's shares have disappointed since its IPO, with decelerating top line growth and profitability struggles.
- The e-Commerce industry is still growing, however, and BigCommerce continues to add new clients to its portfolio that leverage BIGC's strength to expand in Europe and the Middle East.
- BigCommerce is making progress improving its cost structure and could soon become profitable.
- BigCommerce's valuation is attractive, but there are risks of losing customers to Shopify and failing to achieve profitability.
BigCommerce Holdings' ( BIGC ) shares have greatly disappointed since the company’s IPO in 2020 and the company’s top line growth has decelerated to the single digits. However, the e-Commerce platform has a strong position in the enterprise market and is seeing improvement in its gross margin picture. With e-Commerce volumes projected to rise, I believe BigCommerce is on the right track, but the company needs to improve its profitability situation. From a valuation point of view, BigCommerce is a very good deal, in my opinion, and BIGC compares very favorably to Shopify ( SHOP )....
BigCommerce: Solid Value Proposition But Revenue Growth Slowing (Rating Downgrade)