CommerceHub Inc.

Overview Key strengths Key risks Strong tailwinds in e-commerce activity support organic growth Small revenue scale and dependence on top five client accounts, which contribute 45% of revenue Integrated services on customer platforms result in high switching costs Exposure to consumer discretionary spending, which is influenced by the economic cycle High leverage and financial sponsor ownership The recent pandemic and associated lockdowns accelerated the adoption of e-commerce and we continue to see changing consumer buying behaviors as people adapt to living with the pandemic. E-commerce retail sales continued to grow despite a standout 2020, including about 14% growth in 2021 on a year-over-year basis, according to U.S. Census Bureau data. However, CommerceHub reported only 2% year-over-year revenue growth for fiscal

...E-commerce growth remains the biggest demand driver for CommerceHub but changes in consumer spending and economic cycles could slow growth. The recent pandemic and associated lockdowns accelerated the adoption of e-commerce and we continue to see changing consumer buying behaviors as people adapt to living with the pandemic. E-commerce retail sales continued to grow despite a standout 2020, including about 14% growth in 2021 on a year-over-year basis, according to U.S. Census Bureau data. However, CommerceHub reported only 2% year-over-year revenue growth for fiscal 2021. Retailers increased inventory last year due to supply chain concerns and the risk of unfulfilled customer demand, reversing a decade-long trend of holding low inventory. As a result, much of the e-commerce sales growth in 2021 came from existing retailer inventories rather than drop-shipments directly from manufacturers, which limited CommerceHub's growth. However, for the second straight year, CommerceHub ended with 100%...

Full Report