Wrapping up Q3 earnings, we look at the numbers and key takeaways for the e-commerce software stocks, including GoDaddy (NYSE: GDDY) and its peers.

While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.

The 4 e-commerce software stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7% since the latest earnings results.

GoDaddy (NYSE: GDDY)

Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE: GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.

GoDaddy reported revenues of $1.27 billion, up 10.3% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

GoDaddy delivered the weakest full-year guidance update of the whole group. The company added 4,000 customers to reach a total of 20.41 million. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $127.08.

Is now the time to buy GoDaddy? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Shopify (NASDAQ: SHOP)

Starting with just three people selling snowboards online in 2004, Shopify (NYSE: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.

Shopify reported revenues of $2.84 billion, up 31.5% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with a solid beat of analysts’ total payment volume estimates and an impressive beat of analysts’ EBITDA estimates.

Shopify achieved the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $169.61.

Is now the time to buy Shopify? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Wix (NASDAQ: WIX)

Powering over 263 million registered users worldwide with its AI-driven tools, Wix (NASDAQ: WIX) provides a cloud-based platform that helps individuals and businesses create and manage professional websites without requiring coding skills.

Wix reported revenues of $505.2 million, up 13.6% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates and revenue guidance for next quarter meeting analysts’ expectations.

As expected, the stock is down 17.4% since the results and currently trades at $104.82.

Read our full analysis of Wix’s results here.

Commerce (NASDAQ: CMRC)

As a founding member of the MACH Alliance advocating for modern tech standards, Commerce (NASDAQ: CMRC) provides a SaaS platform that enables businesses to build and manage online stores, connect with marketplaces, and integrate with point-of-sale systems.

Commerce reported revenues of $86.03 million, up 2.8% year on year. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.

Commerce achieved the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is down 9.8% since reporting and currently trades at $4.21.

Read our full, actionable report on Commerce here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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