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Why BigCommerce Stock Is Soaring Today

By James Brumley – Nov 5, 2021 at 10:53AM

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Investors finally seem to be seeing just how much growth this company is producing.

What happened

Shares of e-commerce platform provider BigCommerce Holdings (BIGC 1.83%) were higher by more than 29% as of mid-session Friday following Thursday's release of strong third-quarter numbers.

So what

For the three-month span ending in September, e-commerce support outfit BigCommerce lost $21.3 million on revenue of $59.3 million. Results were better on an adjusted/operating basis, with a more modest loss of $3.8 million, or a loss of $0.06 per share.

The prods for the stock's strength are clear. The top line was up 49% year over year, while the operating loss of $7.2 million ($0.16 per share) from the year-ago quarter was essentially cut in half. Better still, both sales and earnings topped estimates for $54.8 million and an operating loss of $0.14 per share.

Rising chart breaking through the upper edge of a computer monitor.

Image source: Getty Images.

It's not just impressive accounting basics buoying the stock, either. The company also reported a 30% increase in the average sales produced by merchants using BigCommerce's online-selling services, while subscription revenue (which is predictable in that it's recurring) grew 59% year over year.

Last quarter's results also extend established growth trends.

Now what

For anyone watching BigCommerce Holdings for any length of time, the solid quarter comes as no real surprise. It's not the first time the company has topped analysts' outlooks, and it won't be the last. It's also not the first time investors have seen double-digit progress from BigCommerce, nor will it be the last.

What is relatively new is the market's response to this reported progress.

After months of lower lows and lower highs, today's gains mark the best single-day gain the stock has logged since August of last year, shortly after its IPO. This jolt may well be what's needed to shake shares out of their long-term rut, by virtue of getting the market's attention. The only flaw with the effort is the big gap between today's low and Thursday's high, which some traders feel can put bearish pressure on a stock.

Even so, Friday's action makes this a name to put on your radar, even if not a name to put in your portfolio just yet. Smart investors will want to let the dust settle before diving into this still-speculative name even if that means leaving some money on the table.

James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends BigCommerce Holdings, Inc. The Motley Fool has a disclosure policy.

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