BigCommerce's Up Market Shift Likely To Boost Bottomline, Analyst Says - BigCommerce Holdings (NASDAQ:BIGC)


  • Needham analyst Scott Berg maintained a Buy rating on BigCommerce Holdings, Inc BIGCwith a price target of $20.00.
  • Berg hosted investor meetings with BigCommerce SVP of Finance and IR Daniel Lentz yesterday and was more confident that the company’s recent GTM shift upmarket is a long-term winning strategy. 
  • 2023 is an operating leverage year, and management anticipates breakeven profitability by mid-2024. 
  • Also Read: BigCommerce’s Strong Black Friday And Thanksgiving Sales Data Impresses Analysts
  • While 2022 was an investment year for BIGC, management noted that 2023 would likely see positive operating leverage. 
  • They also discussed their previously announced target of breakeven adjusted EBITDA by mid-2024, which assumes no change in the existing macro environment.
  • BigCommerce had much better unit economics, with customers selecting a higher product tier. 
  • BigCommerse has an LTV: CAC ratio of 8:1 for Enterprise accounts versus 2:1 for non-Enterprise accounts.
  • The analyst foresees the company’s operating model gaining meaningful leverage in FY23 from this pivot and achieving its stated mid-2024 breakeven Adjusted EBITDA target. 
  • Gross cash likely troughs near $200 million, but Berg believes that target is beatable. 
  • Given its focus on driving operational leverage from its significant GTM investments in 2022, the company believes its gross cash level will trough at no worse than $200 million.
  • After a big GTM investment year, the company’s cash burn has been in focus, especially given the market’s current focus on profitability. 
  • Berg believes upside exists in management’s expectations of another $100 million negative FCF before reaching profitability. 
  • The poor macro also pressured deal volume but not win rates.
  • Price Action: BIGC shares traded lower by 1.29% at $9.15 on the last check Tuesday.


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