E-commerce Software Stocks Q3 Teardown: Wix (NASDAQ:WIX) Vs The Rest
Looking back on e-commerce software stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Wix (NASDAQ:WIX) 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 5 e-commerce software stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 4.4% below.
Luckily, e-commerce software stocks have performed well with share prices up 15.3% on average since the latest earnings results.
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 $444.7 million, up 12.9% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EBITDA estimates.
“The continued momentum and accomplishments achieved this year are a testament to our intense focus on best-in-class innovation,” said Avishai Abrahami, Wix Co-founder and CEO.
Wix Total Revenue
Wix achieved the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 18.8% since reporting and currently trades at $218.39.
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 $1.15 billion, up 7.3% year on year, in line with analysts’ expectations. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ bookings estimates.
GoDaddy Total Revenue
The market seems happy with the results as the stock is up 19.4% since reporting. It currently trades at $193.01.
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 $83.71 million, up 7.3% year on year, exceeding analysts’ expectations by 0.7%. Still, it was a mixed quarter as it posted a slight miss of analysts’ annual recurring revenue estimates.
BigCommerce delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 21.3% since the results and currently trades at $6.90.
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 $2.16 billion, up 26.1% year on year. This result beat analysts’ expectations by 2.2%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ total payment volume estimates.
Shopify delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 18.3% since reporting and currently trades at $106.50.
While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ:VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.
VeriSign reported revenues of $390.6 million, up 3.8% year on year. This print met analysts’ expectations. Taking a step back, it was a mixed quarter as it failed to impress in some other areas of the business.
VeriSign had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 1.2% since reporting and currently trades at $182.94.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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