On Monday, BigCommerce Holdings Inc. (NASDAQ:BIGC) shares plummeted more than 6% after announcing a partnership integration with subscription management platform Chargify. The e-commerce company wants to use the partnership to offer subscription management services to US merchants nationwide.
The partnership brings together one of the best SaaS eCommerce platforms and a powerful B2B-focused subscription platform, in a market where brands are aggressively adopting the subscription model to boost sales.
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BigCommerce shares are down 17% this year and more than 48% over the last 12 months, creating an exciting opportunity to buy the stock.
BigCommerce looks overvalued
From a valuation perspective, BigCommerce shares trade at a steep price-sales ratio of 20.16 and a P/B of 17.10, making the stock less attractive to value investors.
The company has decent forecast earnings growth of about 25.80% this year and 11.60% next year. However, it may not be convincing enough for investors looking for high-growth e-commerce stocks.
Therefore, with shares falling even after announcing a partnership that could boost its top line in the coming years, it may be wise to monitor the performances over the next few quarters before buying.
BigCommerce approaches oversold conditions
Technically, BigCommerce shares appear to be trading in a descending triangle formation in the intraday chart. As a result, the stock has declined to trade closer to the oversold conditions of the 14-day RSI.
Therefore, a short-term rebound could be imminent. However, with the company lacking enough catalyst to justify a significant rally, the stock could continue to fall until it reports its next quarterly results.
Therefore, investors could target extended declines at approximately $42.48, or lower at $36.19. On the other hand, if the trendline support triggers a rebound, the stock could find resistance at about $54.45, or higher at $60.87.
Wait for a retest of $42.48 support?
In summary, although BigCommerce’s stock price decline appears to have pushed the stock closer to oversold conditions, there are no immediate catalysts to trigger an upward rally.
Therefore, it may be best to wait for a retest of the $42.28 support ahead of its upcoming quarterly results.
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