- Needham Analyst Scott Berg reiterated BigCommerce Holdings Inc. Bikku With a buy and a price target of $20.
- BIGC reported mixed results in the fourth quarter of 2022, with slightly lower revenue due to lower e-commerce volumes, but subscription revenue was in line with expectations.
- However, recent efforts to improve profitability have resulted in gains of up to $6 million.
- BIGC’s recent strategic focus on large customers came into full view in the fourth quarter as the Enterprise segment grew ARR by 17% year-over-year, while the Retail segment’s ARR declined by 8% year-over-year.
- Berg believes the fourth quarter results highlight BIGC’s financial profile over the medium term. Strong growth in the Enterprise segment, slowly dissolving retail business and consistent profitability improvement will lead to positive Adjusted EBITDA starting in Q4 2023.
- Given the company’s change in strategy, underlying company growth, and improved profitability, analysts believe the current valuation is attractive even in this digestive period.
- Piper Sandler Analyst Clark Jeffries remains neutral, lowering his price target to $10 from $12.
- BigCommerce’s fourth quarter and fiscal 2023 guidance was mixed, with revenue below estimates but operating margin above estimates. This is because the company has clarified his two goals for 2023. BigCommerce Eyes Enterprise Ecommerce Leadership to Achieve Adjusted EBITDA Profitability by Q4 2023.
- As such, Jefferies believes Enterprise ARR’s growth and adjusted EBITDA margin will be two key metrics to monitor in 2023, reaching breakeven by Q4 2023.
- An uncertain and volatile demand environment for e-commerce and consumer spending has kept analysts on the sidelines until better visibility into the overall ARR growth trough for enterprises and SMBs.
- Price action: At the final check on Friday, BIGC shares fell 19.51% to trade at $9.12.
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