In a report released today, Josh Baer from Morgan Stanley maintained a Hold rating on BigCommerce Holdings (BIGC – Research Report), with a price target of $8.00.
Josh Baer has given his Hold rating due to a combination of factors influencing BigCommerce Holdings. The company has outlined significant operational changes and a comprehensive strategy aimed at accelerating growth. However, despite management’s optimistic outlook, there is skepticism among investors about achieving mid-to-high teens growth in the next 3-5 years, especially given the current macroeconomic conditions and starting point.
The focus on accelerating Annual Recurring Revenue (ARR) growth is a key part of their strategy, with efforts to increase customer wallet share, expand the Total Addressable Market, and emphasize B2B offerings. Despite these strategic initiatives, recent performance has shown a deceleration in ARR growth and a decline in Enterprise Accounts. As a result, the company is seen as a ‘show-me’ story, requiring evidence of stabilization and growth before a more favorable rating can be considered. Therefore, the Hold rating reflects a cautious stance, awaiting signs of execution and improvement in fundamentals.
According to TipRanks, Baer is a 3-star analyst with an average return of 1.3% and a 45.05% success rate. Baer covers the Technology sector, focusing on stocks such as DigitalOcean Holdings, Chegg, and BigCommerce Holdings.