Spotting Winners: GoDaddy (NYSE:GDDY) And E-commerce Software Stocks In Q4
The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how GoDaddy (NYSE:GDDY) and the rest of the e-commerce software stocks fared in Q4.
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 Q4; on average, revenues beat analyst consensus estimates by 1.7% while next quarter's revenue guidance was 0.9% below 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 share prices down 2% 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 $1.1 billion, up 5.8% year on year, falling short of analyst expectations by 0.1%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and full-year.
"GoDaddy demonstrated strong operational execution and financial performance while also making significant progress in our mission of empowering entrepreneurs around the world," said GoDaddy CEO Aman Bhutani.
GoDaddy delivered the weakest performance against analyst estimates of the whole group. The stock is up 5% since the results and currently trades at $118.68.
Read our full report on GoDaddy here, it's free.
Best Q4: Squarespace (NYSE:SQSP)
Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.
Squarespace reported revenues of $270.7 million, up 18.3% year on year, outperforming analyst expectations by 2.9%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.
Squarespace achieved the highest full-year guidance raise among its peers. The stock is up 7.9% since the results and currently trades at $36.4.
Is now the time to buy Squarespace? Access our full analysis of the earnings results 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 $403.8 million, up 13.7% year on year, in line with analyst expectations. It was a decent quarter for the company, with full-year revenue guidance roughly in line with analysts' expectations.
The stock is up 9.9% since the results and currently trades at $137.67.
Read our full analysis of Wix'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 $84.15 million, up 16.2% year on year, surpassing analyst expectations by 3.2%. It was a weaker quarter for the company, with full-year revenue guidance missing analysts' expectations.
BigCommerce had the weakest full-year guidance update among its peers. The stock is down 17.2% since the results and currently trades at $6.84.
Read our full, actionable report on BigCommerce here, it's free.
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 $2.14 billion, up 23.6% year on year, surpassing analyst expectations by 3.4%. It was a strong quarter for the company, with a decent beat of analysts' revenue and free cash flow estimates.
Shopify scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 13.5% since the results and currently trades at $77.1.
Read our full, actionable report on Shopify here, it's free.
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