BigCommerce Holdings, Inc. (NASDAQ:BIGC) Just Reported Earnings, And Analysts Cut Their Target Price

Simply Wall St
·3 min read

BigCommerce Holdings, Inc. (NASDAQ:BIGC) just released its latest first-quarter results and things are looking bullish. Revenues were better than expected, with US$47m in sales some 11% ahead of forecasts. The company still lost a statutory US$0.12 per share, although the losses were 15% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for BigCommerce Holdings

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Taking into account the latest results, the current consensus from BigCommerce Holdings' twelve analysts is for revenues of US$195.4m in 2021, which would reflect a major 28% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 33% to US$0.66. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$190.6m and losses of US$0.64 per share in 2021. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a modest increase to its losses per share forecasts.

Spiting the revenue upgrading, the average price target fell 5.9% to US$69.17, clearly signalling that higher forecast losses are a valuation concern. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values BigCommerce Holdings at US$95.00 per share, while the most bearish prices it at US$53.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 39% growth on an annualised basis. That is in line with its 36% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So it's pretty clear that BigCommerce Holdings is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at BigCommerce Holdings. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of BigCommerce Holdings' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on BigCommerce Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for BigCommerce Holdings going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for BigCommerce Holdings (1 is a bit unpleasant!) that you need to take into consideration.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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