Why Global-e Online Stock Took Off Today
Shares of international e-commerce enabler Global-e Online (NASDAQ: GLBE) took off on Monday after the company reported financial results for the first quarter of 2024. As of 11:30 a.m. ET, Global-e stock was only up 6%, but it had been up 20% earlier in the day.
Growth is faster than expected
Global-e's software allows companies to operate e-commerce businesses across international borders with ease. In Q1, the company processed $930 million in merchandise volume, up 32% year over year and ahead of management's most optimistic guidance of $915 million.
Considering it's doing more business than expected, Global-e's revenue and adjusted profits came in a little higher than expected. Consequently, management modestly raised its guidance in both categories for 2024. Ultimately, I believe it's this higher financial guidance that has investors cheering Global-e stock higher today.
Global-e is getting more profitable
There are two particularly encouraging trends with Global-e's business right now. First, the company's gross profit margin is consistently ticking higher as it grows. The same is true for its free cash flow, as the chart shows.
GLBE Gross Profit Margin (Quarterly) data by YCharts
That's how it should be for software companies such as Global-e, but it doesn't always happen. Therefore, shareholders should be encouraged that the company is gaining operating leverage as it grows.
At the midpoint of management revised guidance, Global-e expects about 32% top-line growth this year as some key partnerships pay off. That's nothing to sneeze at. And if all of these trends continue on their current trajectories, it bodes well for Global-e shareholders long term.Should you invest $1,000 in Global-E Online right now?
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