Analyst David Hynes of Canaccord Genuity maintained a Buy rating on Commerce.com, retaining the price target of $11.00.
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David Hynes has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for Commerce.com. The company is undergoing significant organizational changes aimed at improving operational efficiencies and enhancing product strategies, particularly in the realm of Agentic commerce. Despite these efforts, revenue growth remains modest, with a consistent 3% year-over-year increase for four consecutive quarters. However, the company’s focus on improving margins has been successful, with non-GAAP operating margins increasing by over 400 basis points year-over-year and operating cash flow growing by nearly 90%.
Additionally, while enterprise B2C demand has been sluggish, the B2B segment, which constitutes a significant portion of the business, remains stable. Commerce.com is also investing in data optimization tools like Feedonomics, which could play a crucial role in future growth as they enhance product discoverability. Although growth is not at the desired level, the company’s current valuation appears attractive at approximately 1.2x EV/R on C2026 estimates. This, along with improved margins and a stronger balance sheet, supports the Buy rating, as there is potential for multiple expansion if growth accelerates.
According to TipRanks, Hynes is an analyst with an average return of -6.1% and a 38.96% success rate. Hynes covers the Technology sector, focusing on stocks such as Atlassian, Workday, and HubSpot.
In another report released yesterday, Needham also maintained a Buy rating on the stock with a $10.00 price target.