One of the most exciting things for an investor is to find that breakout stock before it explodes. Even if you invest a small amount in an up-and-coming stock, it could translate into gains of 1,000% or more.

Global-e Online (GLBE -0.12%) is a business-to-business company selling cross-border solutions to e-commerce retailers. Although its name may appear in a retailer's checkout, you may not notice it, since it's not a consumer-facing service. However, you might want to get to know this powerhouse company, and you might want to consider taking a position before it reports fourth-quarter earnings on Feb. 19. Here's why.

The cross-border choice for the choice retailer

Global-e makes it easy for any e-commerce retailer to sell internationally. Its platform fully integrates into a client checkout and provides services like instant customs calculations, delivery options, and localized currencies.

It counts among its clients almost a who's who of A-listers like LVMH and many of its fashion houses. Through its acquisition of competitor Borderfree, Global-e now services Neiman Marcus and Nordstrom, and it seeks to add clients, such as with Torrid and Chopard in the 2024 third quarter. Management says it has a long pipeline of new business.

Adding global sales to an e-commerce business is a no-brainer for growth. For companies already trying to reach the international market, Global-e's streamlined system led to incredible results for many clients. Sigma Sports, for example, had a 120% increase in sales after signing up for Global-e's platform, and a 50% increase in average order volume. U.K. womenswear brand Fold's global online orders increased 41% after it joined the platform.

Global-e also has a partnership with e-commerce leader Shopify. Shopify recently rebranded its white-label cross-border program using Global-e's platform to Shopify Managed Markets, and it's available to millions of merchant clients.

Global-e's revenue increased 32% year over year in the third quarter, and profitability metrics all improved. Adjusted gross profit was up 39%, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $21.1 million to $31.1 million. Net loss improved from $33 million to $22.6 million.

Scaling to a profit

There have been several reasons Global-e has yet to turn a profit. One is the normal route of a growth company, which implies pouring money into making a working business. Eventually, revenue is expected to cover costs, but it takes time. Investors are typically willing to put up with losses when there is a path to profitability, and the business has robust long-term opportunities.

Companies that have recently undergone initial public offerings (IPOs) also often take a while to become profitable as they manage through the initial rounds of stock-based compensation.

Finally, Global-e has a unique factor in its relationship with Shopify. Shopify was an early investor in Global-e and as part of the deal, Shopify has warrants it can choose to exercise. Global-e amortizes these warrants quarterly, and they're expected to be fully amortized by the end of this year. But, they're the main impediment to profits right now.

However, even with the ongoing amortization, Global-e is expected to get near breakeven in the 2024 fourth quarter. As it grows, and with the added pace of the holiday season, management sees it getting close. But Global-e tends to surpass guidance, and it could report its first generally accepted accounting principles (GAAP) profit in the fourth quarter. In any case, it's expecting 2025 to be its first profitable year.

Is it too late to buy?

Global-e stock has been rising in anticipation of a great report. It jumped after its last excellent report in November, and investors are excited about its performance as global inflation moderates. Global-e stock is up 47% over the past year.

At the current price, Global-e stock trades at a price-to-sales ratio of 15. That's quite expensive, but investors expect a lot from this stock. Its forward one-year P/E ratio is 48, which isn't astronomical for a high-growth company.

If Global-e hits or exceeds its fourth-quarter targets and gets close to breakeven or turns its first profit, its stock could skyrocket. If not, it's still likely to soar in 2025 as it reports its first annual profit and after.