What happened
Shares of cross-border payment company Global-E Online (GLBE -0.91%) fell 14% in March, according to data provided by S&P Global Market Intelligence. Although there wasn't any significant news related to the company in March, the company is on the receiving end of investor backlash against fintech companies in the face of volatile macroeconomic trends.
So what
Global-E services digital retailers with cross-border payments systems that make it easier to sell their products all over the world. Some of these services include instant prices in hundreds of different currencies and instant worldwide shipping options, all integrated into a client's digital channels.
Image source: Getty Images.
The company posted fantastic fourth-quarter operating results in February. Revenue increased 54% year over year to a record $82 million, and gross merchandise volume (GMV) increased 66% to $505 million. For the full year, revenue increased 80% year over year to $245 million, and GMV increased 87% to reach $1.4 billion. Gross profit increased 110% over last year, but net loss increased to $75 million after a profit of $3.9 million last year. The net loss was connected to amortization from an investment from Shopify, and without that expense, net income would have increased to $9.4 million.
Global-E has picked up an impressive and growing list of upscale and popular client retailers, recently adding singer Rihanna's Fenty brand and Kanye West's Gap collaboration, Yeezy. It also expanded further into Tokyo and Australia, and it's making progress on an improved integration into Shopify's system, which should attract business from Shopify's vast user base.
Now what
Despite all of this success, Global-E stock is down 45% year to date. The company's fintech focus makes it susceptible to investor sentiment based on macroeconomic conditions. Considering worldwide retail troubles with supply chain disruptions and concerns about inflation and potential raises on interest rates, Global-E's share price has been tanking.
But the underlying strength of the business has been apparent in its growth, opportunities, partnerships, and profitability. At the current price, shares trade at 15 times trailing-12-month sales. That's far from cheap, but it's down from a sky-high valuation of 50 times trailing-12-month earnings at the end of June, not long after the company went public.
Global-E looks like it has a bright future ahead with tremendous growth prospects. Investors may want to wait to buy shares until the price comes down a bit more, but it's worth some premium on the stock price because there's a lot to expect from this company.
