What Happened?
Shares of e-commerce software company Commerce (NASDAQ: CMRC) fell 12% in the morning session after the company reported fourth-quarter 2025 financial results that missed revenue expectations and provided a weak forecast for the upcoming quarter.
While its adjusted earnings of $0.07 per share met analyst estimates, revenue of $89.52 million fell short of forecasts. Looking ahead, the company's outlook for the first quarter of 2026 pointed to revenue of around $83 million, which was below the analyst consensus of $85.99 million. The combination of a revenue miss and a cautious outlook appeared to disappoint investors, leading to the stock's decline.
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What Is The Market Telling Us
Commerce’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Commerce and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 8.2% on the news that fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off. The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.
Commerce is down 39.5% since the beginning of the year, and at $2.46 per share, it is trading 65.4% below its 52-week high of $7.09 from February 2025. Investors who bought $1,000 worth of Commerce’s shares 5 years ago would now be looking at an investment worth $32.73.
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