Shares of e-commerce service provider BigCommerce Holdings (BIGC 5.11%) were down 12.1% headed into Friday's close, largely in response to last quarter's disappointing results.
Investors are certainly surprised, given the stock's reversal. BigCommerce shares had spent the past three months recovering from a sell-off spurred by the previous quarter's similarly lackluster numbers, climbing nearly 67% from May's low to yesterday's close. Friday's setback wiped away roughly a third of that rebound rally.
The catalyst was Q2 numbers. Sales of $49 million were 35% higher year over year, and the per-share loss of $0.17 was significantly less than the loss of $0.54 per share from the second quarter of 2020. The bottom line, however, missed analyst estimates for a more muted loss of only $0.11 per share; topping sales expectations of $46.8 million wasn't enough to prevent a pullback.
Strong revenue growth forecasts aren't helping either. The company projects revenue of between $54.5 million and $55 million for the quarter now underway, and sales of between $210.7 million and $211.7 million for the full fiscal year, both of which are better than current analyst estimates in addition to being better than year-ago comps. In the third quarter of 2020, BigCommerce produced $39.7 million worth of revenue.
It's difficult to pinpoint investors' exact worry; there may be more than one. One of them is certainly concern that in an environment where smaller merchants are reportedly desperate for self-sufficiency when it comes to their e-commerce presence, BigCommerce isn't exactly knocking it out of the park. The lingering lack of profitability may also be a stumbling block, even if the company is making progress on that front.
None of this is exactly new for this young company, however. This was always a high-risk/high-reward prospect. That's not changed since yesterday. As such, Friday's tumble is a buying opportunity for investors who can stomach the risk.