Piper Sandler analyst Brent A. Bracelin reiterated an Overweight rating on the shares of Global-E Online Ltd. (NASDAQ:GLBE), raising the price target to $54 from $38.
The analyst remains particularly bullish on Global-E’s compelling new product catalyst (enabling Shopify Markets Pro) that could help sustain or even accelerate growth in 2024 and 2025. Shopify Inc. (NYSE:SHOP) owns a 13% stake in GLBE.
Global-E is powering $1 billion gross merchandise volume (TTM) at Shopify, representing just 4% of the potential $28 billion cross-border gross merchandise volume opportunity set at Shopify alone.
Also Read: Riding the Cross-Border Commerce Wave: Analysts Bullish on Global E Online’s Long-Term Potential
Every $1 billion of incremental Shopify cross-border GMV could add $160 million+ in total Global-E revenue, the base case being over $400 million in 2022.
Based on the above, the analyst expects second-quarter revenue to be $128.48 million, up 47.2% year over year. Gross margin is expected to contract by 100 basis points to 40.9% in 2Q.
Global-E has generated positive free cash flow, or FCF, for three consecutive years. For FY23, FCF is expected to increase 9.7% year over year, while for FY24, the metric is expected to gain 58.3%.
While there could be a short lag between new customers and the ramp of GMV, Bracelin sees a material upside to consensus growth estimates of 36% for 2024.
For FY23, the analyst expects revenues of $578.11 million, up 41.3% Y/Y.
For FY24, the analyst predicts revenues of $810.14 million, up 40.1%.
Price Action: GLBE shares are trading lower by 0.41% to $42.33 on the last check Thursday.
