On Monday, Global-E Online Ltd (NASDAQ:GLBE) saw its stock price target increased by Benchmark from the previous $41.00 to $45.00, while the firm kept a Buy rating on the stock. The adjustment comes ahead of the company's third-quarter earnings report, which is scheduled for release before market open on Wednesday, November 20, 2024.
The analyst at Benchmark anticipates Global-E Online's third-quarter Gross Merchandise Volume (GMV) to slightly exceed the upper end of its guidance, which was set between $1,070 million and $1,110 million. This projection is based on an analysis closely tied to U.S. non-store retail sales.
In light of the positive momentum noted in October's non-store retail sales, which showed a two-year stack growth, and the general expectation of a record-breaking holiday season, Benchmark has revised its fourth-quarter GMV estimate upwards by 2.2%.
For the fiscal year 2024, the analyst's GMV estimate includes a $200 million contribution from Markets Pro, which is at the lower end of the company's guidance range of $200 million to $300 million. This conservative approach is due to the expectation that merchant net additions will lean towards smaller merchants. As a result, the estimated GMV for 2024 is positioned 4.4% below the high end of Global-E Online's guidance range of $4,605 million to $4,848 million.
The raised price target to $45 reflects a lowered weighted average cost of capital (WACC) and minor upward revisions to estimates. The analyst's valuation is based on a discounted cash flow (DCF) model.
In other recent news, Global-E Online Ltd has been the subject of significant financial developments. The company's second-quarter financial results surpassed consensus expectations, with a record non-peak quarter Gross Merchandise Value (GMV) of $1.08 billion, a 31% year-on-year increase, and a significant rise in revenue of 26% to $168 million.
Despite these positive results, Global-E revised its 2024 GMV and revenue guidance downward due to a major customer's bankruptcy and a dip in consumer sentiment.
Morgan Stanley (NYSE:MS) has adjusted its stance on Global-E, downgrading the stock from Overweight to Equalweight and setting a new price target of $40.00. The firm cites shifts in market perception and stock performance as reasons for the change. However, the analyst remains confident in Global-E's trajectory, expecting the company to benefit from recent and upcoming large enterprise merchant wins.
In addition, KeyBanc and BofA Securities have also adjusted their outlook on Global-E, reducing their price targets but maintaining positive ratings on the stock. These revisions were primarily due to the bankruptcy of a major customer, Ted Baker (LON:TED), and a general decline in consumer spending. However, Global-E's sustained top-line growth trajectory, bolstered by a strong pipeline of new clients, supports a positive outlook. These are recent developments that investors should note.
InvestingPro Insights
Global-E Online Ltd's (NASDAQ:GLBE) recent price target increase by Benchmark aligns with several positive indicators from InvestingPro. According to InvestingPro Tips, analysts anticipate sales growth for GLBE in the current year, which supports Benchmark's optimistic outlook on the company's GMV. Additionally, the company's strong return over the last three months, with a 16.61% price total return, reflects growing investor confidence.
InvestingPro data shows that GLBE's revenue growth remains robust, with a 27.51% increase over the last twelve months as of Q2 2024, reaching $632.89 million. This growth trajectory supports Benchmark's expectations for the upcoming earnings report. The company's gross profit margin of 43.22% also indicates a healthy core business model.
While GLBE is not currently profitable, with an operating income margin of -15.58%, InvestingPro Tips suggest that analysts predict the company will be profitable this year. This aligns with Benchmark's positive stance and increased price target.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for GLBE, providing a deeper understanding of the company's financial health and market position.
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