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On Tuesday, Stifel analysts reiterated a Buy rating and a $9.00 price target on BigCommerce Holdings (NASDAQ:BIGC), following the company’s first Analyst Day in three years. According to InvestingPro data, the stock currently trades at $6.08, suggesting potential upside based on analyst consensus targets ranging from $6 to $11. The event was notable as it came after the appointment of CEO Travis Hess (NYSE:HES) last fall and the announcement of BigCommerce’s new streamlined go-to-market (GTM) strategy and more focused investments, particularly in quota carrying headcount.
The company is shifting its emphasis to curated offerings designed for complex needs, with a strategy that now includes key drivers such as Feedonomics, Makeswift, and Payments, alongside a more partner-friendly business model. This approach appears to be working, as InvestingPro data shows impressive gross profit margins of 76.69% and revenue growth of 7.61% over the last twelve months. The primary goal for BigCommerce is the acceleration of its Annual Recurring Revenue (ARR), with mid-to-high teens growth expected within a 3-5 year timeframe.
Stifel’s analysts believe that the long-term trajectory of e-commerce sales will continue to act as a tailwind for the company. With the recent reorganization now complete, they anticipate improved execution and results moving forward. InvestingPro analysis reveals several more key insights about BigCommerce’s financial health and growth prospects. Get access to 8 additional ProTips and comprehensive analysis in the Pro Research Report. The successful implementation of the company’s strategy is considered critical, with an emphasis on cross-selling and up-selling to enhance the unit economics of the business over time.
The analysts expressed confidence in the company’s future, maintaining the Buy rating due to the perceived favorable balance between risk and reward, and the currently depressed valuation of BigCommerce’s stock. The $9 price target reflects Stifel’s assessment of the company’s potential as it embarks on its refined strategic path.
In other recent news, BigCommerce Holdings has made several strategic announcements and adjustments. Needham analysts have maintained a Buy rating with a $10 price target, citing significant changes under the company’s new leadership, including the development of a payment solution and a revamped go-to-market strategy. These changes are expected to enhance BigCommerce’s brand awareness and drive future growth, particularly in the B2B and SMB segments. Meanwhile, BigCommerce has amended the severance terms for CEO Travis Hess, aligning executive compensation with industry best practices amid potential changes in company control.
Additionally, BigCommerce has introduced new tools to enhance app development on its platform, including a redesigned app development portal and a Unified Billing feature. This initiative aims to streamline the app creation process and simplify billing for third-party developers. However, Barclays (LON:BARC) analysts have downgraded BigCommerce’s stock from Equal Weight to Underweight, lowering the price target to $7.00 due to execution challenges and a difficult macroeconomic environment. Despite the downgrade, Barclays acknowledges BigCommerce’s strategic changes, such as appointing a new CEO and altering its go-to-market strategy, which may lead to future growth.
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