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Following slowing growth, a declining number of enterprise accounts, and lackluster profitability, BigCommerce (BIGC -1%) initiated a change at the top, removing former CEO Brent Bellm and appointing President Travis Hess as his successor. The move has not garnered much of a positive reaction today, reflecting the massive hill BIGC still needs to climb. Shares have tumbled by over 35% on the year and over 95% from 2020 highs.

With a new leader, BIGC is looking to reenergize itself. However, economic conditions and competitive pressures are acting as formidable headwinds. At the same time, BIGC's balance sheet is troubling, experiencing several periods of negative cash flows and widening net losses. With so much on his plate, investors are skeptical that the act of appointing a new CEO alone will be enough of a spark to jumpstart BIGC's array of issues.

• What does BIGC do? The company's primary business is offering its software-as-a-service, or SaaS, platform for businesses to set up online marketplaces, similar to its main rival, Shopify (SHOP). BIGC caters primarily to enterprises, with roughly two-thirds of its total revs branching from this cohort, but also has a third of its revs stemming from small and medium-sized businesses, or SMBs.
• What has been going so wrong for BIGC? Competition has been a thorn in BIGC's side. SHOP bolstered its brand recognition during the pandemic and came out the other side in a much better position than BIGC, illuminated by sustained periods of 20%+ revenue growth and steadily improving profitability. Compare this to BIGC, which has not delivered growth of 20%+ since 3Q22, posting a tepid +8.5% improvement on its top line in Q2. Meanwhile, BIGC's net income stagnated recently, delivering nearly flat yr/yr growth in Q2.
  • SHOP's outperformance relative to BIGC indicates potentially constant market share loss for BIGC, putting it into a deeper hole for Mr. Hess to deal with.
• SHOP's success may be luring BIGC's current and potential enterprise customers to its platform. BIGC has endured sliding enterprise account numbers for three consecutive quarters, with the total stuck around 5,900. While average revenue per enterprise account has grown -- up 7% yr/yr in Q2 -- it has proven insufficient in igniting more attractive top-line growth.

While these sticking points are concerning and keeping shares of BIGC near all-time lows, Mr. Hess has the potential to remove some of the water from a sinking ship. The new CEO has comprehensive experience in IT consulting, previously holding leadership roles at Accenture (ACN). He has also served on partner advisory boards for SHOP and other software firms. As such, sweeping changes may be in store for BIGC in the near future. The company reports Q3 results sometime in the next few weeks.

Nevertheless, BIGC needs to prove itself before investors feel confident about piling in. Competition is intense, with plenty of options to pick from when setting up an e-commerce site. At the same time, macroeconomic conditions are unfavorable and can produce heightened volatility and uncertainty.