What happened
Shares of Global-e Online (GLBE 0.69%) gained 38.8% in August 2022, according to data from S&P Global Market Intelligence. The Israel-based provider of international e-commerce shopping and shipping services posted impressive results in the second quarter, followed by a surge of bullish analyst reports. The stock gained 34% in the span of two days.
So what
Global-e's second-quarter sales rose by 52% year over year, landing at $87.3 million. That result was 5% above the analyst consensus, which had been set in line with the midpoint of Global-e's guidance. Management set up third-quarter revenue targets comfortably ahead of the Wall Street projections at the time and also boosted its full-year sales guidance by 6%.
At least three analyst firms raised their price targets for Global-e over the next 48 hours. They cited the company's strong results in a challenging market. Koji Ikeda from Bank of America went as far as to call Global-e's guidance "conservative," even though the top-line growth was projected to accelerate to a 72% year-over-year gain in the third quarter.
NASDAQ: GLBE
Key Data Points
Now what
This small-cap stock may look risky at first glance, but Global-e has a tight partnership with e-commerce giant Shopify (SHOP 1.23%). The e-commerce technology veteran even has a direct financial interest in Global-e, giving it a clear incentive to support the smaller business as needed. That's a helpful safety net, in case the flow of cross-border online shopping transactions slows down dramatically.
That being said, Global-e trades at a lofty 17 times trailing sales today. In other words, the stock isn't cheap, even though share prices have fallen 64% below their 52-week highs. It wouldn't take much of a misstep to send that chart far lower again. Shopify's stabilizing influence could come in handy in the near term. All things considered, Global-e looks like an impressive growth stock for the long haul, as long as you can handle some painful bumps in the road.
