What happened
Shares of cross-border e-commerce company Global-E Online (GLBE 6.25%) gained 15% in November, according to data provided by S&P Global Market Intelligence. The company posted a solid third-quarter earnings report in November. However, it's erased all of those gains already in December.
So what
Global-E markets cross-border shopping and payment solutions for e-commerce companies. These include features such as shopping in local currencies and instant shipping and customs calculations. Its client list includes top-tier names like Hugo Boss and LVMH, and it's demonstrating solid growth.
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In the third quarter, gross merchandise volume increased 86%, and revenue increased 77%. It added new clients to its roster and expanded relationships with several others. It's particularly enjoying its partnership with Shopify, which has broadened its exposure to new merchants. Global-E is easily integrated into Shopify's platform as well as many other e-commerce platforms, such as Meta Platforms (formerly known as Facebook), and it has programs for both large and small companies.
Management raised its full-year outlook after the report, and it's expecting $77.4 million in fourth-quarter revenue at the midpoint, and $240 million in full-year revenue. That was raised, quite a lot, from $229 million at the midpoint, and it reflects a company with high growth potential. The company is well positioned to benefit from trends toward global e-commerce and digital payments.
However, as investor fears about the new omicron coronavirus variant took hold of the markets over the past few weeks, Global-E stock wasn't spared. It's directly in the line of new pandemic restrictions, which could impact global commerce, supply chains, and economic policy.
Now what
Global-E posted a $29 million loss in the third quarter related to its relationship with Shopify. It has, however, been profitable in the past, which is a strong point in its favor, and not so typical for a new growth company.
Its stock has gained 138% since its initial public offering in May, even with the declines in December. The company is dealing with short-term volatility, but it has a strong future ahead.
