Commerce.com, Inc. (CMRC) stock intrinsic value fair value estimate & owner earnings analysis

Commerce.com, Inc. (formerly BigCommerce) sells subscription software that lets merchants run online stores, plus Feedonomics, a product-data service that feeds merchants' catalogues to marketplaces and advertising channels. Revenue was $342.3 million in 2025, up 2.8 percent, and has risen every year from $91.9 million in 2018. About 76 percent of sales are in the United States. How we measure earnings. We start from operating cash flow, remove the swings in working capital, subtract stock-based compensation as a real cost, and subtract the capital spending needed to stand still. Working capital matters a great deal here: in 2024 and 2025 customers moving from monthly to annual contracts added $14.3 million and $13.0 million of prepaid deferred revenue. That is a one-time timing benefit, so it is stripped out. On this basis owner earnings per share were about -$0.97 in 2020, -$0.97 in 2021, -$1.57 in 2022, -$0.70 in 2023, -$0.28 in 2024 and -$0.21 in 2025 (roughly -$16.8 million in 2025). The 2025 figure carries about $11.0 million of restructuring charges and $23.6 million of stock compensation. A $2.4 million website domain purchase in 2025 was treated as a one-off acquisition, not maintenance spending. The 2018 and 2019 years were before the 2020 IPO and are not included. The business has changed since the 2025 restructuring, so we look at the most recent actuals for its current level. What changed in 2026. In the first half of 2026 the company reported net income of $4.8 million (against a $8.7 million loss a year earlier), operating cash flow of $23.5 million, and stock compensation of $8.0 million (against $12.4 million). Capital spending was $9.3 million. After removing the working-capital effect we could identify, first-half owner earnings were roughly $3.7 million. That figure is approximate because one small working-capital line, deferred commissions, was not available to us. In 2025 the second half produced about $2.5 million less operating cash flow than the first half, so we estimate about $5 million a year. Two quarters of profit is a short record, and the second quarter was weaker than the first: revenue was flat and free cash flow was about $0.1 million. We therefore treat about $5 million as the level, and do not extrapolate the first quarter. Growth check. Actual owner earnings improved by about $5.2 million in 2025 (from -$22.0 million to -$16.8 million). Our base case starts 2026 at about +$5 million, a far bigger step. This is not assumed growth: it is the level the business has already reported in the first half of 2026, driven by the stock-compensation cuts and the end of most restructuring costs (second-quarter restructuring was $5 thousand versus $1.6 million a year earlier, per the company's results release). We credit no further growth. The company's 2026 revenue range of $336.5 to $344.5 million straddles the 2025 result, so revenue growth is not secured, and cost savings beyond what has been reported are management targets. The 10-K also says research spending is expected to rise as a share of revenue in 2026. Base case, $0.69 per share. About $5 million a year, flat, for 20 years, discounted at 6 percent, over roughly 82.8 million shares. What keeps it going: a recurring subscription base with a 78.7 percent gross margin in 2025, and revenue that has not fallen in any year since 2018. Beyond 20 years we name nothing and credit nothing. Bear case, $0.00 per share. Owner earnings hover around zero. What we can point to: $150 million of 7.5 percent convertible notes due October 1, 2028 cost about $11.25 million a year in cash interest; the conversion price is $16.00, so conversion is not a way out unless the shares rise far above that; first-half capital spending of $9.3 million was already above all of 2025 ($8.6 million); and the first-half profit leaned on stock compensation falling. The company reported $157.5 million of cash and securities at June 30, 2026, about equal to the notes, so in this case shareholders are left with essentially nothing. This is not a case where the company owes more than it is worth, but it is close. Bull case, $1.65 per share. Owner earnings of about $10 million a year, made of the $7.5 million first-half pace annualised plus part of the $3.0 million to $6.6 million of remaining restructuring costs the company said would fall away through 2026. Then 3 percent yearly growth for ten years, the pace of the last two years (7.6 percent in 2024, 2.8 percent in 2025), and flat for ten more years. This is the generous end of what the filings support. What would make us wrong. Higher if the company holds first-half profitability while growing customers or prices. Lower if stock compensation climbs back, capital spending stays at the first-half rate, or the 2028 notes need to be refinanced at worse terms or by issuing many new shares. Deferred revenue and annual billing shifts have flattered cash flow in recent years, and we have removed them, so headline cash-flow figures will look better than our numbers.