Shares of BigCommerce (BIGC -3.35%) surged on Wednesday, with the e-commerce software-as-a-service stock apparently still benefiting from recent Facebook-related news. On Tuesday, BigCommerce unveiled an Instagram integration, allowing users of the social media app to buy products directly. The stock soared following that announcement, and it was up another 26% by 11:25 a.m. EDT Wednesday.
Merchants using BigCommerce's platform will now be able to use "checkout on Instagram," which allows them to sell products directly through the Instagram app. This eliminates the need for the potential buyer to click through to a website to complete the order.
BigCommerce is a competitor to Shopify, which has seen tremendous growth during the pandemic as businesses pivoted online. Shopify reported a near-doubling of revenue in its second quarter, while gross merchandise value surged by almost 120%.
BigCommerce has yet to report quarterly results following its initial public offering in August, but the company was growing at a less impressive pace earlier this year. BigCommerce reported revenue growth of about 47% in the first quarter, although growth may have accelerated since then. The Instagram integration will further help the cause.
BigCommerce generated revenue of $112 million in 2019. Following Wednesday's rally, the company is being valued at roughly $8.7 billion. That puts the price-to-sales ratio at an eye-watering 78. The company was unprofitable in 2019 and in the first quarter of 2020.
BigCommerce may have plenty of growth ahead as it competes with Shopify for online merchants in an e-commerce market that has been boosted by the pandemic. But the enthusiasm may be getting a little out of hand.