Why Shopify-Backed Global-E Online Stocks Soared This Morning


What happened

Shares of Global-E online (GLBE -4.48%) rose sharply on Tuesday, reaching as high as 29.5%. As of 11:38 a.m. ET, the stock was up 27.9%.

The catalyst that propelled the cross-border e-commerce specialist higher was the company’s quarterly financial results, which were much better than investors had expected.

So what

Global-E Online generated $87.3 million in second-quarter revenue, which jumped 52% year-over-year, driven by gross merchandise volume (GMV) of 534 million dollars, which jumped 64%. This resulted in a loss per share of $0.25.

To give context to these numbers, consensus analyst estimates called for revenue of $83.5 million and a loss per share of $0.30, so Global-E easily overcame both of these hurdles.

Investors were particularly excited by the improvement in the company’s adjusted gross profit, which jumped 77% year-on-year, resulting in an adjusted gross margin of 41.8%, a marked improvement over 36% in the prior year quarter.

Global-E also announced a major partnership with disney to support House of Mouse in selling consumer products to customers around the world.

Now what

Investors will remember that Shopify (STORE -7.22%) has signed a strategic partnership with Global-E Online, making it the exclusive provider of cross-border services for its merchants. Additionally, Shopify currently owns approximately 14.4 million shares of Global-E Online, a 9% stake valued at nearly $507 million. This gives the company a large and growing base of potential customers in need of its cross-border services.

Perhaps more importantly, after slashing its full-year forecast last quarter, Global-E shocked investors by not only raising its outlook, but also taking it to its all-time high until now this year. The company now expects revenue of $416 million in the middle of its forecast (vs. $393 million), which would represent growth of around 70%.

After a beat and a rise, investors are clearly convinced that the death of e-commerce has been overblown, proving once again that Global-E Online stock is still a buy.

Danny Vena has positions in Global-e Online Ltd., Shopify and Walt Disney and has the following options: January 2023 long calls at $1,140 on Shopify and January 2023 long calls at $1,160 on Shopify. The Motley Fool holds positions and recommends Global-e Online Ltd., Shopify and Walt Disney. The Motley Fool recommends the following options: January 2023 $1,140 Long Calls on Shopify, January 2024 $145 Long Calls on Walt Disney, January 2023 $1,160 Short Calls on Shopify, and $155 Short Calls $ of January 2024 on Walt Disney. The Motley Fool has a disclosure policy.


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