Let’s dig into the relative performance of Shopify (NASDAQ:SHOP) and its peers as we unravel the now-completed Q1 e-commerce software earnings season.
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 mixed Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
While some e-commerce software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.
Best Q1: Shopify (NASDAQ:SHOP)
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 $2.36 billion, up 26.8% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a decent quarter for the company with a narrow beat of analysts’ billings estimates but gross merchandise volume in line with analysts’ estimates.
Shopify scored the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 21% since reporting and currently trades at $114.41.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it’s free.
VeriSign (NASDAQ:VRSN)
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 $402.3 million, up 4.7% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter.
The market seems happy with the results as the stock is up 10.9% since reporting. It currently trades at $280.
Is now the time to buy VeriSign? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: GoDaddy (NYSE:GDDY)
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 $1.19 billion, up 7.7% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a mixed quarter as it posted a miss of analysts’ annual recurring revenue estimates.
As expected, the stock is down 13.1% since the results and currently trades at $167.40.
Read our full analysis of GoDaddy’s results here.
BigCommerce (NASDAQ:BIGC)
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 $82.37 million, up 2.5% year on year. This print was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
BigCommerce had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is down 7.4% since reporting and currently trades at $4.82.
Read our full, actionable report on BigCommerce here, it’s free.
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 $473.7 million, up 12.8% year on year. This number met analysts’ expectations. Taking a step back, it was a mixed quarter as it also produced a narrow beat of analysts’ billings estimates but EBITDA in line with analysts’ estimates.
The stock is down 19.4% since reporting and currently trades at $146.79.
Read our full, actionable report on Wix here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
