Global-E Online stock target raised on strong Q3, Buy rating held

On Thursday, Benchmark upgraded the stock price target for Global-E Online Ltd (NASDAQ:GLBE) to $60, up from the previous $45, while maintaining a Buy rating on the stock. The adjustment follows the company's impressive third-quarter performance and favorable guidance.

The e-commerce firm reported robust gross merchandise volume (GMV) momentum, attributed to higher-than-expected volumes from significant new merchants such as Victoria Secret, Manchester United (NYSE:MANU), and Harrods. This performance, particularly in Europe, has been a highlight, signaling strong returns on the company's year-to-date sales and marketing investments despite some slowdown in same-store sales growth over the past quarters.

The report also referenced the loss of high-margin volumes from Ted Baker, which didn't significantly impact the overall positive trend. Analysts expect the addition of another major department store, comparable to Harrods, to start contributing to revenue early next year, further boosting GMV.

Shopify (NYSE:SHOP) Managed Markets are also anticipated to provide accelerating GMV tailwinds. In line with these developments, management has set a target for GAAP profitability beginning in the second quarter of 2025, supported by the conclusion of Global-E Online's commercial agreement with Shopify by the end of April 2025.

The anticipated commercial agreement asset amortization for 2025 has been revised to $77 million, a substantial decrease from the previously expected $150 million. Consequently, a GAAP operating profit of $65 million is now projected for the company. These financial forecasts underscore the company's strategic growth and operational efficiency initiatives leading into the next fiscal year.

In other recent news, Global-E Online Ltd has reported impressive earnings and revenue results, surpassing expectations with a record non-peak quarter Gross Merchandise Volume (GMV) of $1.08 billion, marking a 31% year-on-year increase, and a significant rise in revenue to $168 million.

However, the company revised its 2024 GMV and revenue guidance downward due to a major customer's bankruptcy and a dip in consumer sentiment. On the analyst front, Piper Sandler increased the company's price target to $63.00, maintaining an Overweight rating. Needham also showed optimism by raising its price target to $55.

Conversely, Morgan Stanley (NYSE:MS) downgraded the stock from Overweight to Equalweight, setting a new price target of $40.00. Other firms such as KeyBanc and BofA Securities adjusted their outlook on Global-E, reducing their price targets but maintaining positive ratings. These are recent developments that investors should note.

InvestingPro Insights

Global-E Online Ltd's (NASDAQ:GLBE) recent upgrade by Benchmark aligns with several positive indicators from InvestingPro data. The company's revenue growth of 27.51% over the last twelve months and 26.03% in the most recent quarter supports the robust GMV momentum mentioned in the article. This growth trajectory is further reinforced by an InvestingPro Tip suggesting that analysts anticipate sales growth in the current year.

Despite the company not being profitable over the last twelve months, another InvestingPro Tip indicates that analysts predict profitability this year. This aligns with management's target for GAAP profitability beginning in Q2 2025, as mentioned in the article. The company's strong financial position is evident from the InvestingPro Tip noting that Global-E holds more cash than debt on its balance sheet, which could provide flexibility for future growth initiatives.

The market's positive sentiment towards Global-E is reflected in its stock performance, with InvestingPro data showing a 52.91% price total return over the past year and a 59.32% return over the last six months. This performance correlates with the company's reported success with new major merchants and the anticipated contributions from upcoming partnerships.

For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Global-E Online, providing a deeper understanding of the company's financial health and market position.

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