Is Global-e Online a good e-commerce stock to invest in?
Based in Petah Tikva, Israel, Global-e Online Ltd. (GLBE) provides a platform to enable and accelerate direct-to-consumer cross-border e-commerce in Israel, the UK, the US and internationally. Its platform allows international buyers to buy online and merchants to sell worldwide.
GLBE’s Q1 2022 revenue increased 65% year-over-year, supported by a 71% year-over-year increase in Gross Goods Value (GMV). However, the company’s net loss widened significantly from the year-ago quarter to $53.58 million. Additionally, the company reduced its full-year revenue outlook from $411m-$421m to $383m-$403m due to its loss of business resulting from its market exit. Russian, which contributed 2% to its GMV. Despite the launch of new partnerships with Adidas and other iconic brands, the stock is expected to remain under pressure due to macroeconomic uncertainties.
GLBE shares are down 70% year-to-date and 40.8% over the past year to close last trading session at $18.99. It is currently trading 77.3% below its 52-week high of $83.77, which it reached on August 31, 2021.
Here is what could influence GLBE’s performance in the coming months:
GLBE’s total operating expenses increased 600.5% year-over-year to $78.86 million for the first quarter ended March 31, 2022. The company’s net loss was significantly expanded year over year to $53.58 million. Additionally, its loss per share widened 337.5% year-over-year to $0.35. Additionally, its adjusted EBITDA declined 37.3% year-over-year to $3.28 million.
Growth in turnover should not strengthen the bottom line
While analysts expect the company’s revenue to grow 59.5% and 46% respectively in fiscal 2022 and 2023, GLBE’s EPS is expected to remain negative.
Lower profitability than the industry
GLBE’s trailing 12 month net profit margin and EBITDA margin are negative compared to the industry average of 6.64% and 12.22%. Likewise, its 12-month leveraged FCF margin is negative compared to the industry average of 3.60%. Additionally, the stock’s trailing 12-month ROA is negative compared to the industry average of 6.05%.
In terms of forward non-GAAP P/E, GLBE’s 97.49x is 718.4% above the industry average of 11.91x. Likewise, its forward EV/EBITDA of 63.86x is 682.2% higher than the industry average of 8.16x. And the stock’s forward P/S of 7.31x is 703.3% above the industry average of 0.91x.
POWR ratings reflect bleak outlook
GLBE has an overall D rating, which is equivalent to Sell in our POWR rating system. The POWR Rankings are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.
Our proprietary scoring system also rates each stock against eight distinct categories. GLBE has a D rating for quality, in line with its asset turnover rate of 0.45% over the last 12 months, which is 56.8% below the industry average of 1.05%.
It has an F rating for value, consistent with its forward EV/S of 6.25x, 485.6% better than the industry average of 1.07x.
GLBE is ranked No. 30 out of 32 stocks in the F-rated Internet Services industry. Click here to access GLBE’s Growth, Momentum, Stability and Sentiment ratings.
Shares of GLBE are currently trading below their 50-day and 200-day moving averages of $26.87 and $48.39, respectively, indicating a downtrend. Additionally, the company gave poor revenue forecasts for this year. Due to its weak financials, stretched valuation and below-industry profitability, the stock could decline further in the coming months. So, it is better to avoid it now.
How does Global-e Online Ltd work? (GLBE) Up to his peers?
GLBE has an overall POWR rating of D, which is equivalent to a sell rating. Therefore, one might consider investing in other Internet-Services stocks with an A (Strong Buy) or B (Buy) rating, such as Liquidity Services, Inc. (LQDT), Perion Network Ltd. (PERI) and Shutterstock, Inc. (SSTK).
GLBE shares were trading at $20.28 per share on Friday afternoon, up $1.29 (+6.79%). Year-to-date, the GLBE is down -68.01%, compared to a -12.30% rise in the benchmark S&P 500 over the same period.
About the Author: Dipanjan Banchur
Ever since he was in elementary school, Dipanjan had been interested in the stock market. This enabled him to obtain a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan is particularly interested in reading and analyzing emerging trends in financial markets. After…