Investing.com — Interest in web and e-commerce software companies has improved ahead of third-quarter results, but worries that artificial intelligence could hurt their businesses persist, Oppenheimer said in a recent note.
The gain largely tracks a wider recent pickup in software, the brokerage said, and interest in commerce software is likely to stay tepid until business results stabilize or improve.
Commerce platform Shopify is expected to report third-quarter revenue growth 2 to 3 percentage points above Wall Street’s forecast of 31.6%, as strong consumer demand continues, according to Oppenheimer’s talks with buy-side firms.
Those firms also look for gross merchandise volume growth of about 32% to 33%, versus a 30.3% forecast, and a free cash flow margin above 20%, versus 19.5%, after stronger second-quarter results. Oppenheimer raised its price target on Shopify to $205 from $175.
Web platform Wix.com is expected to post bookings and revenue growth in line with forecasts of 10% and 12%, but weaker demand from smaller designers and partners, as activity shifts toward AI tools such as Base44, could delay a return to faster growth, Oppenheimer said.
Operating profit and free cash flow margins are seen at 13% and 16%, after a workforce cut of about 20% finalized in June. Some buy-side firms worry bookings growth could slip to the high single digits.
Domain and hosting company GoDaddy is expected to report third-quarter bookings growth of 5.0%, in line with forecasts, and revenue about 0.5 percentage point above them, with higher EBITDA than forecast.
Management has flattened second-half growth in its A&C business to high single digits, versus a 10.4% forecast, as it moves customers to its Airo product to address AI disruption. Shares have been buoyed in part by a Financial Times report in late September that GoDaddy had received a takeover offer from Gen Digital, Oppenheimer said.
E-commerce software firm Commerce.com is expected to report third-quarter revenue in line with an $83.5 million forecast, with operating profit $2 million to $3 million higher after a workforce cut.
The company lowered the midpoint of its full-year revenue outlook by $18 million in the second quarter, citing a more cautious view of second-half new account bookings and softness in B2C replatforming. The outlook range is $336.5 million to $344.5 million.