BigCommerce Is Likely To Perform Much Worse Than This Major Peer, Says Bearish Analyst

BigCommerce Holdings Inc BIGC shares were tanking in morning trading on Monday.

The company’s stock is likely to underperform that of its peers, according to BofA Securities.

The BigCommerce Holdings Analyst: Koji Ikeda downgraded the rating on BigCommerce Holdings from Neutral to Underperform, while reducing the price target from $11 to $7.50.

The BigCommerce Holdings Thesis: There are few catalysts to drive BigCommerce’s shares in the medium term and the setup for the company’s revenue and profit upside for 2024 appearing “unattractive,” Ikeda said in the downgrade note.

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Soft demand is likely to impact BigCommerce’s revenue growth, which is the “key metric” in the e-commerce software category, the analyst stated. He added that the company is likely to generate revenue growth of 5.7% in 2024, compared to the U.S. industry outlook of 8.2%, global pure-play peers of 31% and Shopify Inc SHOP of 24%.

“BigCommerce operates in the upmarket where: competition is fierce (Salesforce Inc CRM, Oracle Corp ORCL, etc.), is mostly rip-and-replace opportunities, and the macro is tough, which are risks to revenue growth,” Ikeda wrote.

BigCommerce’s job postings are down 40% over the past three weeks, while that of Shopify have risen by 25% over the past week, which suggested the company might be trying to “protect product margins at the expense of revenue upside,” he further said.

BIGC Price Action: Shares of BigCommerce Holdings had declined by 3.71% to $7.01 at the time of publication on Monday.

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