Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of BigCommerce Holdings, Inc. (NASDAQ:BIGC) have suffered share price declines over the last year. To wit the share price is down 69% in that time. BigCommerce Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Shareholders have had an even rougher run lately, with the share price down 52% in the last 90 days. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
Because BigCommerce Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
BigCommerce Holdings grew its revenue by 44% over the last year. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 69% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think BigCommerce Holdings will earn in the future (free profit forecasts).
A Different Perspective
We doubt BigCommerce Holdings shareholders are happy with the loss of 69% over twelve months. That falls short of the market, which lost 3.8%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 52% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand BigCommerce Holdings better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for BigCommerce Holdings you should know about.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.