1 Unstoppable Growth Stock Trading at a Price You May Never See Again

1 Unstoppable Growth Stock Trading at a Price You May Never See Again

All it takes is one incredible growth stock to supercharge your portfolio. If you find this high-growth stock, it can make up for other mediocre stocks or even losses. This is one reason why a diversified portfolio is important. No one knows what the future holds and you want your eggs divided into different baskets.

Global-e online (NASDAQ:GLBE) is a high-growth stock that is trading near its lowest valuation ever, and growth investors should consider buying it at these prices.

The Best Ecommerce Stock You’ve Never Heard Of

Global-e markets a business-to-business platform for e-commerce retailers to engage in cross-border commerce. Users connect it to their websites and it gives them the ability to offer a wide selection of international services on their checkout pages, from localized currencies to instant customs calculations and varied shipping options.

These are the type of services every retailer needs to start shipping their products internationally, and Global-e makes it easy. It’s no surprise that it regularly adds new high-profile clients or has demonstrated phenomenal growth.

Gross merchandise volume (GMV) increased 32% year-over-year in the first quarter of 2024 and revenue increased 24%. During the quarter, the company added Heydude by Crocs and Donna Karan in the United States, as well as luggage brands Antler and SoHo Home in the United Kingdom, among others. It also expanded many partnerships, such as adding new regions for Adidas and new brands for Coty.

Global-e has a partnership with the e-commerce giant Shopify, which recently launched a cross-border white-label solution for its merchants called Shopify Market Pro. He also recently signed a deal with Wix.com to provide its services on Wix e-commerce sites.

Management expects growth to accelerate in the second half, with the launch of some large planned partnerships and the ramp-up of the Shopify Market Pro business. Global-e said it has dozens of brands in operation, as well as a strong pipeline of new clients. The company raised its outlook for revenue, GMV and adjusted earnings before interest, taxes and depreciation (EBITDA) for the full year following the publication of first quarter results.

But it is the long-term prospects that seem most convincing. Global-e is still a young company and could really take off when the economy improves. E-commerce continues to grow in importance and as a percentage of overall retail sales, and as we evolve into a global economy, Global-e’s services will become even more in demand.

Put the risks on the table

The main risk for Global-e at the moment is that it will not be profitable, even if profitability indicators have improved. Gross margin increased 38% year over year, outpacing revenue growth, and gross margin increased from 41.2% to 43.4%. Adjusted EBITDA improved from $14.5 million to $21.3 million, and net loss narrowed from $43.1 million to $32.1 million.

These are solid improvements, but they are still far from achievable. generally accepted accounting principles (GAAP) profitability. Part of Global-e’s partnership with Shopify includes warrants allowing Shopify to purchase Global-e shares that Global-e has written off as expenses. These currently represent a significant part of the total and will not be fully amortized until 2025.

Although management envisions accelerated growth in the second half, the company could still be negatively affected by continued inflation and the potential for recession. Many of its clients target high-end customers, which gives it a certain resilience. But any company active in retail is exposed to these risks during economic volatility.

For me at least, the growth story currently looks much more compelling than the risks.

A price too low to ignore

Global-e is growing and becoming more profitable, but Global-e stock is nearing its lowest price-to-sales ratio on record.

1 Unstoppable Growth Stock Trading at a Price You May Never See Again

GLBE PS Ratio Chart

It may be a stretch to call a price-to-sales ratio of 8 objectively cheap, but Global-e is a high-growth stock with considerable future potential, which is why its stock commands a premium. This is a great opportunity to acquire shares and profit as Global-e shares continue to rise.

Should you invest $1,000 in Global-E Online right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil holds positions in Global-E Online. The Motley Fool features and recommends Amazon, Apple, Global-E Online, Shopify, and Wix.com. The Motley Fool recommends Crocs. The Motley Fool has a disclosure policy.

1 Trading Unstoppable Growth Stocks at a Price You May Never See Again was originally published by The Motley Fool

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