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Why Global-E Online Stock Was on Fire Tuesday

By Danny Vena – Nov 16, 2021 at 5:15PM

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The cross-border e-commerce specialist got some love from Wall Street.

What happened

Shares of Global-E Online (GLBE 2.88%) surged sharply higher Tuesday, jumping as much as 15.4%. At the end of the trading day, the stock was still up 15.3%.

The catalyst that sent the cross-border e-commerce platform soaring was bullish commentary courtesy of a Wall Street analyst who began covering the stock.

So what

Needham analyst Scott Berg initiated coverage on Global-E Online with a buy rating, while also issuing a price target of $75. His new estimate would represent potential gains for investors of more than 35% over the coming year, compared with the stock's closing price on Monday.

Happy smiling young woman looking at laptop screen.

Image source: Getty Images.

The bullish call came in the wake of Global-E's record third-quarter financial results, which were released just last week. The company delivered revenue that grew 77% year over year, and excluding one-time charges related to its IPO in May, adjusted EBITDA surged 185%. At the same time, gross merchandise volume -- or the value of products sold on its platform -- increased 86%.

Additionally, Global-E's gross margin expanded to 38.6% from 30.2% in the prior-year period, as leverage from the company's cloud-based services kicked in.

Now what

Global-E also raised its full-year guidance on the heels of its record results. The company is now expecting revenue of roughly $240 million,  which would represent growth of 348% from $53.6 million in the prior-year quarter. 

The company's platform provides a host of tools for merchants that help reduce the complexity associated with international selling. It helps ease challenges including foreign language translation, inter-country regulatory compliance, currency exchange, local payment methods, and customs and duties. 

As if to prove its value, Global-E not only scored a $193 million pre-IPO investment from e-commerce platform provider Shopify (SHOP 1.37%), but it was also selected as the exclusive provider of cross-border services for Shopify's 1.7 million merchants, which is quite a feather in the cap of the fledgling public company.

Given all the good news surrounding Global-E Online, it's easy to see why Wall Street is sitting up and taking notice.

Danny Vena owns shares of Global-e Online Ltd. and Shopify and has the following options: long January 2023 $1,140 calls on Shopify and long January 2023 $1,160 calls on Shopify. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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