Q3 Earnings Outperformers: GoDaddy (NYSE:GDDY) And The Rest Of The E-commerce Software Stocks
As e-commerce software stocks’ Q3 earnings season wraps, let's dig into this quarter's best and worst performers, including GoDaddy (NYSE:GDDY) and its peers.
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 a mixed Q3; on average, revenues beat analyst consensus estimates by 0.9% while next quarter's revenue guidance was 0.8% above consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but e-commerce software stocks held their ground better than others, with the share prices up 25.7% on average since the previous earnings results.
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 $1.07 billion, up 3.5% year on year, in line with analyst expectations. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter. Growth is slow these days, but at least GoDaddy delivered strong free cash flow.
"GoDaddy is at the forefront of one of our most exciting eras yet, with the product investments we've made over the past several years driving cutting-edge solutions that cater to the evolving needs of our customers," said GoDaddy CEO Aman Bhutani.
GoDaddy delivered the slowest revenue growth of the whole group. The stock is up 43.2% since the results and currently trades at $107.7.
Read our full report on GoDaddy here, it's free.
Best Q3: 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 $1.71 billion, up 25.5% year on year, outperforming analyst expectations by 2.6%. It was a very strong quarter for the company, with a significant improvement in its gross margin and a decent beat of analysts' revenue estimates.
Shopify scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 69.3% since the results and currently trades at $82.64.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.
Weakest Q3: 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 $376.3 million, up 5.4% year on year, falling short of analyst expectations by 0.8%. It was a weak quarter for the company, with a miss of analysts' revenue estimates.
VeriSign had the weakest performance against analyst estimates in the group. The stock is up 0.9% since the results and currently trades at $206.35.
Read our full analysis of VeriSign's results here.
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 $393.8 million, up 13.9% year on year, surpassing analyst expectations by 1.1%. It was an impressive "beat and raise" quarter with revenue guidance exceeding expectations.
The stock is up 45.2% since the results and currently trades at $130.5.
Read our full, actionable report on Wix here, it's free.
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 $78.05 million, up 7.8% year on year, falling short of analyst expectations by 0.1%. It was a mixed quarter for the company, with a miss of analysts' revenue estimates., while the revenue outlook for the next quarter came in roughly in line with Wall Street's expectations.
BigCommerce had the weakest full-year guidance update among its peers. The stock is down 14.3% since the results and currently trades at $8.6.
Read our full, actionable report on BigCommerce here, it's free.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
The author has no position in any of the stocks mentioned
