Headquartered 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 United Kingdom, the United States, and Internationally. Its platform enables international shoppers to buy online and merchants to sell worldwide.
GLBE’s first-quarter 2022 revenue increased 65% year-over-year, supported by a 71% year-over-year increase in Gross Merchandise Value (GMV). However, the company’s net loss widened significantly compared to the year-ago quarter to $53.58 million. Moreover, the company cut its full-year revenue outlook from the range of $411 million - $421 million to $383 million - $403 million due to its loss of business resulting from its exit from the Russian market, which contributed 2% to its GMV. Despite launching new partnerships with Adidas and other iconic brands, the stock is expected to remain under pressure due to macroeconomic uncertainties.
GLBE’s shares have declined 70% in price year-to-date and 40.8% over the past year to close the last trading session at $18.99. It is currently trading 77.3% below its 52-week high of $83.77, which it hit on August 31, 2021.
Here’s what could influence the performance of GLBE in the upcoming months:
Disappointing Financials
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 widened significantly year-over-year to $53.58 million. Also, its loss per share widened 337.5% year-over-year to $0.35. In addition, its adjusted EBITDA declined 37.3% year-over-year to $3.28 million.
Top-line Growth is Not Expected to Strengthen Bottom-line
While analysts expect the company’s revenue to increase 59.5% and 46% in fiscal 2022 and 2023, respectively, GLBE’s EPS is expected to remain negative.
Lower-than-industry Profitability
GLBE’s trailing-12-month net income margin and EBITDA margin are negative compared to the industry average of 6.64% and 12.22%. Likewise, its trailing-12-month levered FCF margin is negative compared to the industry average of 3.60%. Furthermore, the stock’s trailing-12-month ROA is negative compared to the 6.05% industry average.
Stretched Valuation
In terms of forward non-GAAP P/E, GLBE’s 97.49x is 718.4% higher than the 11.91x industry average. Likewise, its 63.86x forward EV/EBITDA is 682.2% higher than the 8.16x industry average. And the stock’s 7.31x forward P/S is 703.3% higher than the 0.91x industry average.
POWR Ratings Reflect Bleak Prospects
GLBE has an overall D rating, equating to Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. GLBE has a D grade for Quality, in sync with its 0.45% trailing-12-month asset turnover ratio, which is 56.8% lower than the industry average of 1.05%.
It has an F grade for Value, consistent with its 6.25x forward EV/S, 485.6% higher than the industry average of 1.07x.
GLBE is ranked #30 out of 32 stocks in the F-rated Internet – Services industry. Click here to access GLBE’s Growth, Momentum, Stability, and sentiment ratings.
Bottom Line
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. Moreover, the company has given poor revenue guidance for this year. Due to its weak financials, stretched valuation, and lower-than-industry profitability, the stock may pull back further in the upcoming months. So, it is best avoided now.
How Does Global-e Online Ltd. (GLBE) Stack Up Against Its Peers?
GLBE has an overall POWR Rating of D, equating to a Sell rating. Therefore, one might want to 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, GLBE has declined -68.01%, versus a -12.30% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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