Q1 Earnings Outperformers: Shopify (NYSE:SHOP) And The Rest Of The E-commerce Software Stocks
Let's dig into the relative performance of Shopify (NYSE: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 6 e-commerce software stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 1.5%. while next quarter's revenue guidance was in line with consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but e-commerce software stocks have shown resilience, with share prices up 10% on average since the previous earnings results.
Shopify (NYSE: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 $1.86 billion, up 23.4% year on year, in line with analysts' expectations. Overall, it was an ok quarter for the company with a significant improvement in its gross margin but a miss of analysts' billings estimates.
"You're seeing the strongest version of Shopify in our history. Our outstanding Q1 performance is clear proof of our dedication to the new shape of Shopify, our commitment to operating with a consistent team size, and our focus on building for the long-term to deliver both growth and profitability," said Harley Finkelstein, President of Shopify.
Shopify scored the fastest revenue growth of the whole group. The stock is down 15.5% since reporting and currently trades at $65.15.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $80.36 million, up 12% year on year, outperforming analysts' expectations by 4.1%. It was a solid quarter for the company with an impressive beat of analysts' billings estimates and full-year revenue guidance topping analysts' expectations.
BigCommerce achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.6% since reporting. It currently trades at $7.74.
Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.
Slowest Q1: 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 $419.8 million, up 12.2% year on year, in line with analysts' expectations. It was a mixed quarter for the company with a decent beat of analysts' billings estimates but a decline in its gross margin.
Wix posted the weakest performance against analyst estimates and weakest full-year guidance update in the group. Interestingly, the stock is up 22.5% since the results and currently trades at $166.50.
Read our full analysis of Wix's results here.
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 $384.3 million, up 5.5% year on year, in line with analysts' expectations. More broadly, it was an ok quarter for the company.
VeriSign had the slowest revenue growth among its peers. The stock is down 2.7% since reporting and currently trades at $177.75.
Read our full, actionable report on VeriSign here, it's free.
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 $1.11 billion, up 7% year on year, surpassing analysts' expectations by 1.1%. Zooming out, it was an ok quarter for the company with a solid beat of analysts' bookings estimates but a decline in its gross margin.
The stock is up 16.7% since reporting and currently trades at $145.01.
Read our full, actionable report on GoDaddy here, it's free.
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