BigCommerce’s SWOT analysis: e-commerce firm’s stock faces growth hurdles

BigCommerce Holdings Inc. (NASDAQ:BIGC), a provider of e-commerce solutions, is navigating a period of significant transformation as it seeks to overcome recent growth challenges and position itself for future success in the competitive online retail landscape. Currently trading near its 52-week low of $4.85, the company maintains impressive gross profit margins of 77.27% despite recent headwinds. The company’s strategic initiatives and organizational changes have caught the attention of analysts, who are closely monitoring the potential impact on BigCommerce’s financial performance and stock valuation. According to InvestingPro analysis, BIGC appears undervalued based on its Fair Value estimate, suggesting potential upside for investors willing to weather the current transformation period.

Company Overview and Recent Performance

BigCommerce operates in the U.S. Software (ETR:SOWGn) sector, offering e-commerce platforms and solutions to businesses of various sizes. The company has recently undergone substantial organizational changes, including the appointment of a new management team and a restructuring of its go-to-market approach.

In the first quarter of 2025, BigCommerce’s performance was in line with expectations, although analysts project a slight deceleration in the second quarter. While the company isn’t currently profitable, InvestingPro data indicates net income is expected to grow this year, with analysts forecasting positive earnings. Despite this near-term softness, the company’s management remains optimistic about the second half of the year, citing improvements in go-to-market cohesion and a growing sales pipeline. With liquid assets exceeding short-term obligations (current ratio of 2.34), the company appears well-positioned to fund its growth initiatives.

Strategic Initiatives

At the heart of BigCommerce’s transformation is a new go-to-market strategy aimed at reinvigorating growth. The company has doubled its sales capacity and is working to unify its product teams, moves that management believes will lay the foundation for future success. These changes are part of a broader effort to improve cross-sell capabilities and accelerate revenue growth.

During its Analyst Day in March 2025, BigCommerce’s leadership expressed confidence in the company’s ability to reaccelerate growth into the mid-high teens, based on the foundational work completed. This optimism stems from the ongoing business transformation and the potential of the new strategic direction.

Financial Outlook

Analysts project earnings per share (EPS) for BigCommerce to reach $0.20 in fiscal year 2025 and $0.31 in fiscal year 2026. These estimates reflect expectations of improving financial performance as the company’s strategic initiatives take hold. However, InvestingPro reveals that 5 analysts have recently revised their earnings expectations downward for the upcoming period. For deeper insights into BIGC’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

While the recent organizational changes have not yet been reflected in BigCommerce’s financial results or near-term guidance, analysts anticipate that the impact of these efforts may become more apparent in the latter half of 2025. The company’s ability to execute on its plans and demonstrate tangible improvements in growth metrics will be crucial for investor confidence.

Industry Trends

The e-commerce sector continues to evolve rapidly, presenting both opportunities and challenges for companies like BigCommerce. Analysts maintain a positive industry view, suggesting a favorable environment for e-commerce solution providers. However, the competitive landscape remains intense, with numerous players vying for market share in the digital retail space.

As online shopping habits continue to solidify post-pandemic, BigCommerce’s success will depend on its ability to offer innovative solutions that meet the changing needs of merchants and consumers alike. The company’s focus on expanding its sales capacity and enhancing its product offerings aligns with broader industry trends toward more comprehensive and scalable e-commerce platforms.

Bear Case

Can BigCommerce overcome its recent growth challenges?

BigCommerce has faced headwinds in maintaining its growth trajectory, leading to concerns among investors and analysts. The company’s recent performance has been underwhelming, with expectations of a slight deceleration in Q2 2025. This pattern of sluggish growth raises questions about BigCommerce’s ability to compete effectively in the crowded e-commerce solutions market.

The "Underweight" rating assigned by some analysts reflects skepticism about the company’s near-term prospects. There is a risk that BigCommerce may struggle to differentiate itself from competitors and capture a larger share of the market. If the company fails to reverse its growth trends, it could lead to further stock price depreciation and erode investor confidence.

Will the company’s restructuring efforts yield tangible results?

While BigCommerce has undertaken significant organizational changes, including doubling its sales capacity and unifying product teams, these efforts have yet to translate into improved financial performance. The effectiveness of these restructuring initiatives remains unproven, and there is a risk that they may not deliver the anticipated benefits.

Execution risks associated with implementing new strategies could hinder BigCommerce’s progress. If the company fails to effectively integrate its expanded sales force or if the new go-to-market approach does not resonate with potential clients, the expected growth reacceleration may not materialize. Investors may need to exercise patience as they wait for concrete evidence of success, which could lead to short-term stock price volatility.

Bull Case

How might BigCommerce’s new go-to-market strategy drive future growth?

BigCommerce’s revamped go-to-market strategy, coupled with its expanded sales capacity, has the potential to significantly boost the company’s growth prospects. By doubling its sales force, BigCommerce can increase its market reach and potentially accelerate customer acquisition. The unified product teams may lead to more cohesive and compelling offerings, enhancing the company’s value proposition to merchants.

Analysts note that while these changes have not yet been reflected in financial results, they lay a strong foundation for future success. If BigCommerce can effectively execute its new strategy, it could lead to the anticipated reacceleration of growth into the mid-high teens. This improved performance would likely result in positive stock price momentum and increased investor interest.

Could improved cross-sell capabilities significantly boost revenue?

BigCommerce’s focus on enhancing its cross-sell capabilities presents a substantial opportunity for revenue growth. By better leveraging its existing customer base and offering complementary products and services, the company can increase average revenue per user and improve overall financial performance.

Successful implementation of cross-selling initiatives could lead to higher customer retention rates and expanded relationships with existing clients. This, in turn, may result in more predictable and sustainable revenue streams. If BigCommerce can demonstrate effective cross-selling, it could positively impact investor sentiment and potentially lead to upward revisions in analyst projections and stock valuations.

SWOT Analysis

Strengths:

• New management team with a clear strategic vision
• Expanded sales capacity to drive growth
• Positive industry outlook for e-commerce solutions

Weaknesses:

• Recent challenges in maintaining growth momentum
• Execution risks associated with new strategies
• Financial results yet to reflect organizational changes

Opportunities:

• Potential for growth reacceleration in the latter half of 2025
• Improved cross-sell capabilities to boost revenue
• Expanding market for e-commerce solutions post-pandemic

Threats:

• Intense competition in the e-commerce platform market
• Potential economic headwinds affecting online retail spending
• Rapidly evolving technology landscape requiring constant innovation

Analysts Targets

• Barclays (LON:BARC): $6.00 (May 9th, 2025)
• Barclays: $7.00 (March 12th, 2025)
• Barclays: $7.00 (February 21st, 2025)
• Barclays: $7.00 (November 8th, 2024)

This analysis is based on information available up to May 9th, 2025, and reflects the most recent analyst perspectives on BigCommerce’s stock performance and outlook. With the stock showing significant potential based on InvestingPro’s Fair Value analysis and multiple growth catalysts ahead, investors seeking detailed insights can explore BIGC’s complete financial picture, including over 30 additional ProTips and comprehensive valuation metrics, available through the InvestingPro platform.

InvestingPro: Smarter Decisions, Better Returns

Gain an edge in your investment decisions with InvestingPro’s in-depth analysis and exclusive insights on BIGC. Our Pro platform offers fair value estimates, performance predictions, and risk assessments, along with additional tips and expert analysis. Explore BIGC’s full potential at InvestingPro.

Should you invest in BIGC right now? Consider this first:

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To evaluate BIGC further, use InvestingPro’s Fair Value tool for a comprehensive valuation based on various factors. You can also see if BIGC appears on our undervalued or overvalued stock lists.

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