BigCommerce's Underlying Trends Show Progress Post Mixed Q4, Analyst Says

Needham analyst Scott Berg reiterated BigCommerce Holdings Inc BIGC with a Buy and a $20 price target.
BIGC reported mixed 4Q22 results with a slight revenue miss driven by weaker Ecommerce volumes, yet Subscription revenue was in line with expectations.
However, recent profitability improvement efforts drove a ~$6 million profit beat.
BIGC's recent strategic focus on larger customers was in full view in 4Q as its Enterprise segment grew ARR 17% Y/Y while its Retail segment ARR fell 8% Y/Y.
Berg believes the 4Q results highlight the BIGC financial profile over the intermediate term: solid Enterprise segment growth, a slowly melting Retail business, and consistent profitability improvements, which drive positive adjusted EBITDA starting in 4Q23.
Given the company's strategy change, underlying Enterprise growth, and higher profitability, the analyst views the current valuation as attractive even in this digestion period.
Piper Sandler analyst Clarke Jeffries maintained a Neutral and lowered the price target from $12 to $10.
BigCommerce's 4Q and FY23 guidance were mixed, with revenue below estimates but operating margins above, as the company made two 2023 objectives clear. BigCommerce eyes Enterprise e-commerce leadership and achieve adjusted EBITDA profitability by 4Q23.
Therefore, Jeffries believed the two key metrics to monitor in 2023 are Enterprise ARR growth and adjusted EBITDA margin, reaching breakeven by 4Q23.
With an uncertain and volatile demand environment for e-commerce & consumer spending more broadly, the analyst remained on the sidelines until better visibility into a growth trough across Enterprise & SMB ARR.
Price Action: BIGC shares traded lower by 19.51% at $9.12 on the last check Friday.

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