On Tuesday, KeyBanc Capital Markets adjusted its outlook on Global-E Online Ltd (NASDAQ:GLBE), increasing the price target to $55.00 from the previous $38.00 while maintaining an Overweight rating on the stock.
This revision follows the company's third-quarter financial results, which surpassed expectations, and an updated full-year guidance that reflects an acceleration in Gross Merchandise Value (GMV) and top-line growth projected for the fourth quarter.
Global-E Online's third quarter was marked by a robust performance, attributed to the addition of new merchants such as Torrid, Fossil, and Raycon. Moreover, Harrods is set to be the last significant merchant to debut on the platform in the second half of 2024. The company also introduced a demand generation product, leveraging the assets acquired from Borderfree. This new offering is anticipated to have a more significant influence in the second half of 2025.
The analyst from KeyBanc expressed a positive outlook on the long-term growth trajectory for Global-E Online. The raised price target of $55.00 is based on a 7.0x 2026 Enterprise Value to Revenue (EV/R) multiple, which is informed by the analyst's higher estimates following the recent performance and strategic developments.
Global-E Online's recent successes and the introduction of its demand generation product are expected to contribute to the company's continued growth. With the last major merchant launch of the year planned and the potential impact of the new product in the upcoming year, the company appears to be on a path to further expansion. KeyBanc's revised price target reflects confidence in Global-E Online's future performance and market position.
In other recent news, Global-E Online has reported robust third-quarter earnings and revenue results, with a Gross Merchandise Volume (GMV) of $1.08 billion, a 31% year-on-year increase, and a significant rise in revenue to $168 million. However, the company revised its 2024 GMV and revenue guidance downward due to a major customer's bankruptcy and a dip in consumer sentiment.
Analyst firms Jefferies, Benchmark, Piper Sandler, and Needham have raised their price targets for Global-E Online, while Morgan Stanley (NYSE:MS) downgraded the stock to Equalweight, setting a new price target of $40.00. Other firms such as KeyBanc and BofA Securities also adjusted their outlook on Global-E, reducing their price targets but maintaining positive ratings.
These recent developments reflect the company's financial performance and market perception. The company's Managed Markets segment is performing in line with company forecasts, with projections that merchant adoption will continue to rise into 2025. Finally, Global-E Online is expected to benefit from the addition of a major department store and the conclusion of its commercial agreement with Shopify (NYSE:SHOP) by the end of April 2025.
InvestingPro Insights
Global-E Online Ltd (NASDAQ:GLBE) continues to demonstrate strong growth potential, aligning with KeyBanc's optimistic outlook. According to InvestingPro data, the company's revenue growth stands at an impressive 28.76% over the last twelve months as of Q3 2024, with quarterly revenue growth in Q3 2024 reaching 31.71%. This robust growth trajectory supports KeyBanc's decision to raise the price target.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which corroborates the company's updated full-year guidance and the expected acceleration in GMV. Additionally, the tip indicating that Global-E Online holds more cash than debt on its balance sheet suggests financial stability, potentially enabling the company to invest in growth initiatives like the new demand generation product.
The stock's recent performance has been noteworthy, with InvestingPro data showing a 21.71% return over the last week and a 37.08% return over the last month. This aligns with the "significant return over the last week" InvestingPro Tip and reflects investor confidence in the company's recent results and future prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for Global-E Online, providing deeper insights into the company's financial health and market position.
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