Is the Recently Listed Global-E (NASDAQ:GLBE) Stock a Good Investment Option?
Stock Analysis & Ideas

Is the Recently Listed Global-E (NASDAQ:GLBE) Stock a Good Investment Option?

Story Highlights

Israeli company Global-E Online appears to be well-positioned to benefit from an increase in online e-commerce activities across the globe. The company, which got listed on the stock exchange in 2021, is already in the good books of analysts, hedge funds, and retail investors.

Since its inception in 2013, Global-E Online Ltd. (NASDAQ:GLBE) has made its mark as the leading platform that provides consumers with easy cross-border e-commerce facilities globally. The company, which entered the capital market in May 2021, has solid growth opportunities that could look attractive to prospective investors.

On TipRanks, this Israeli company enjoys a Strong Buy consensus rating based on nine Buys. A few days ago, Koji Ikeda of Bank of America Securities maintained a Buy rating on the stock while increasing his price target to $40 (37.03% upside potential) from $30. The analyst considers Global-E as “best positioned in the large global cross-border eCommerce opportunity.”

GLBE’s average price target of $41.44 represents 41.97% upside potential from the current level. The highest price target is $51 and the lowest is $31.

It is worth noting that shares of this $4.7-billion company have increased 9.1% since it went public in 2021. The company sold 17.25 million shares to the public for $25 per share. The net proceeds from the initial public offering (IPO) were $396.4 million. The stock’s closing price of $29.19 on Monday represents a 16.8% surge from the IPO price.

Now, let’s discuss the factors that have strengthened the company’s growth prospects over the past few quarters.

Factors Underpinning Global-E’s Growth Story

A solid customer base, partnerships, and growth in market presence through buyouts have been a boon for this online e-commerce solutions provider over the past few quarters. Notably, Global-E acquired Pitney Bowes Inc’s (NYSE:PBI) Borderfree cross-border e-commerce solutions business in July 2022. In the same month, Pitney Bowes agreed to supply logistics services related to cross-border e-commerce business to the clients of Global-E.

In April, Global-E and Klarna, a retail bank, extended their partnership to include their operations in Canada. These two players are also working together in Australia, France, the U.S., Spain, Italy, and the UK.

In January, Global-E acquired Flow Commerce Inc., a software solutions provider related to cross-border e-commerce operations. This buyout is expected to strengthen the company’s technological capabilities in the field. Further, Global-E has taken initiatives to boost its business in Australia by collaborating with Australia Post in November 2021.

It is worth noting that Global-E’s revenues increased 79.8% year-over-year to $245.3 million in 2021. Its gross merchandise value (GMV) at $1,449 million in 2021 was up 87% from the previous year. Also, the headcount increased to 473 in 2021 from 289 in 2020. These metrics are reflective of the company’s growth in 2021.

In the first half of 2022, the company’s revenues were $163.6 million and its GMV was $989.8 million, representing year-over-year growth of 58.2% and 67%, respectively. In August 2022, the company’s Founder and CEO, Amir Schlachet, said, “We remain focused on executing across all fronts, to tap the massive global direct-to-consumer opportunity.”

For 2022, Global-E forecasts revenues to be within the $406-$426 million range and GMV to be $2,450-$2,550 million. These projections compare favorably with the earlier forecast of $383-$403 million for revenues and $2,280-$2,400 million for GMV.

Retail Investors and Hedge Funds Are Bullish on GLBE Stock

According to TipRanks, investor sentiment on Global-E is Very Positive. Notably, the total number of portfolios with investments in GLBE stock has increased 6.4% in the last 30 days. Also, the top portfolios holding GLBE stocks increased 10.4% during the same period.

Likewise, hedge funds, too, are Very Positive about GLBE stock, as they purchased 765.5 thousand shares of Global-E in the last quarter.

Concluding Remarks for GLBE’s Prospective Investors

As discussed above, the top-line prospects of Global-E appear very bright. The company is opting for every means, from partnerships to acquisitions, to enhance its market presence. Despite this tailwind, the fact that the company is yet to achieve profitability should be known to its prospective investors. High cost of revenue and huge operating expenses are major hurdles in this quest.

At this juncture, investors willing to ignore the current losses and focus on long-term prospects could find GLBE stock attractive. As a quick reminder, the stock is popular among analysts, hedge funds, and retail investors. Also, its Smart Score of eight out of 10 on TipRanks mirrors its potential to outperform the broader market.

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