BigCommerce Holdings, Inc.: Initiation of Research Coverage

Tuesday, January 12, 2021

William Blair & Company initiated research coverage of BigCommerce Holdings, Inc. (BIGC $64.65), which provides a SaaS platform that powers branded e-commerce stores.

Analyst Matthew Pfau estimated the company would generate 20%-plus revenue growth for the next several years, with revenue of $147.9 million in 2020, $174.6 million in 2021, and $209.2 million in 2022.

“The market for e-commerce platforms is large and growing,” Pfau said. “The overall U.S. e-commerce market was growing low- to midteens annually pre-COVID, and we expect a faster CAGR over the next several years for BigCommerce’s addressable segment as the shift online has been accelerated. This increase is driven by both existing online businesses growing or doing a higher percentage of overall sales online, and new merchants creating an online presence. One key theme for BigCommerce is more brands creating a direct-to-consumer presence to take better control of their distribution and reduce reliance on retailers that may be struggling. We also view B2B as a fertile market for BigCommerce as its open, flexible solution fits well with the needs of B2B e-commerce companies, and the B2B e-commerce market is largely occupied by legacy e-commerce platform solutions.”

Pfau continued, “BigCommerce’s solution, focused on the midmarket, provides businesses with the ability to create and manage their e-commerce websites and is delivered in a SaaS model. Relative to last-gen platforms, BigCommerce can be implemented quickly and is much easier to use. Versus other modern e-commerce platforms, BigCommerce has taken a more open approach and leverages partners for noncore e-commerce platform functionality, and has the ability to be a more bespoke solution. We estimate that 2020 will be the third straight year of ARR growth acceleration for BigCommerce. Although continued ARR acceleration is likely not sustainable, we believe the company is well positioned to increase revenue at 20% or greater annually over the next several years given the size of the market opportunity, relatively low penetration of current-gen platforms, and near- and long-term market tailwinds.”

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William Blair or an affiliate is a market maker in the security of BigCommerce Holdings, Inc.

William Blair or an affiliate expects to receive or intends to seek compensation for investment banking services from BigCommerce Holdings, Inc. or an affiliate within the next three months.

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Current Ratings Distribution (as of 1/11/21)

Coverage Universe
Outperform (Buy): 73%
Market Perform (Hold): 27%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 23%
Market Perform (Hold): 8%
Underperform (Sell): 0%

* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.

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