Global-e Online (GLBE 1.98%) stock gained 92% in 2023 according to data provided by S&P Global Market Intelligence. The e-commerce company continues to do brisk business despite inflation and retail pressure.
The benefits of a business-to-business platform
Global-e operates a business-to-business platform with cross-border e-commerce solutions. It makes it simple for any online retailer to integrate global shipping and payment services into their existing websites, essentially enabling them to easily expand their target market to the entire world.
It’s easy to see the attraction for any e-commerce retailer, especially when sales have been flagging for many of them in the inflationary environment. That gives it some resilience in a harsh operating climate, but it’s also been slowing down as gross merchandise volume has been decelerating.
In the 2023 third quarter, revenue increased 27% year over year. Non-GAAP (adjusted) gross profit increased 36%, and adjusted gross margin improved from 41.5% to 44.4%. Net loss shrank from $64.5 million to $33.1 million.
Global-e has plenty of growth drivers. It inks new deals with clients consistently, with brands like Tory Burch and Rebecca Minkoff signing up in 2023, among many others, and it continues to expand its partnerships with major names like Walt Disney and LVMH.
It has had a relationship with e-commerce giant Shopify since before it went public. Shopify has invested in its business and also offers its services to its millions of merchant clients. It recently launched a white-label solution called Shopify Markets Pro using Global-e’s platform, and Global-e anticipates it being an important revenue driver. It also recently joined Wix.com as a service for e-commerce retailers on its platform.
2024 could be even better
As inflation eases and more people spend more money, Global-e’s sales could soar this year. Management already sees trends improving and is expecting growth to accelerate again. It raised its 2023 fourth-quarter and full-year outlook and is guiding for revenue to increase 43% for the full year. It’s expecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $92 million, or nearly double last year’s.
It’s not likely to become net profitable this year, but profitability should continue to improve. Global-e has a strong business proposition with a long growth runway, and it should provide years of gains for investors. It’s not for the highly risk averse, but most investors can feel comfortable taking a position right now.
Jennifer Saibil has positions in Global-e Online and Walt Disney. The Motley Fool has positions in and recommends Global-e Online, Shopify, Walt Disney, and Wix.com. The Motley Fool has a disclosure policy.
