1 Trade unstoppable growth stocks at a price you may never see again

All it takes is one company with incredible growth to supercharge your portfolio. If you find this high growth stock, it can offset other mediocre and even losing stock. This is one reason why a diversified portfolio is important. No one knows what the future holds, and you want your eggs to be in different baskets.

Global-e Online (NASDAQ: GLBE) is a high growth stock with a valuation near all-time lows, and growth investors should consider purchasing it at these prices.

The best e-commerce stocks you haven’t heard of

Global-e offers a B2B platform for e-commerce retailers to trade cross-border. Users connect it to their websites, giving them the ability to offer a wide selection of international services on their checkout pages, from localized currencies to instant customs calculations and a variety of shipping options.

These are the types of services every retailer needs to start shipping internationally, and Global-e makes it easy. It’s no surprise that it regularly adds significant new clients or shows phenomenal growth.

In the first quarter of 2024, gross merchandise volume (GMV) was up 32% year-over-year and revenue was up 24%. Heydude was added to the company during the quarter Crocs and Donna Karan in the US, as well as luggage brands Antler and SoHo Home in the UK and many others. It has also expanded many partnerships, for example by adding new regions Adidas and new brands for What are you.

Global-e partners with the e-commerce giant Shopify, which recently launched a cross-border white-label solution for its merchants called Shopify Market Pro. She also recently signed an agreement with, among others, Wix.com to provide services on Wix e-commerce sites.

Management expects growth to accelerate in the second half of the year, with the planned launch of some large partnerships and building momentum in the Shopify Market Pro business. Global-e said it has dozens of brands in the market and a large number of new customers. Following the release of first-quarter results, the company raised its revenue, GMV and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance for the full year.

However, the long-term perspective seems to be the most convincing. Global-e is still a young company and could really become a success when the economic situation improves. E-commerce continues to grow in importance and as a percentage of total retail sales, and as we move to a global economy, the demand for Global-e services will be even greater.

Putting risk on the table

The main risk for Global-e currently is that it is not profitable, although profitability metrics are improving. Gross profit increased 38% year over year, outpacing revenue growth, and gross margin increased from 41.2% to 43.4%. Adjusted EBITDA increased from $14.5 million to $21.3 million and net loss decreased from $43.1 million to $32.1 million.

This is a solid improvement, but still falls short of generally accepted accounting principles (GAAP) profitability. Part of Global-e’s partnership with Shopify includes orders for Shopify to purchase Global-e stock, which Global-e amortizes as expenses. They currently account for part of the total and will only be fully amortized in 2025.

Although management expects accelerated growth in the second half of the year, the company may still be negatively impacted by persistent inflation and the risk of recession. Many of its clients target higher-end customers, which provides some resilience. However, every retail business is susceptible to such risks in the event of economic instability.

At least to me, the growth story looks much more compelling than the current risks.

Price too low to ignore

Global-e is growing and becoming more profitable, but Global-e stock is nearing its lowest price-to-sales ratio ever.

GLBE PS data by YCharts

It would be a stretch to call a price-to-sales ratio of 8 objectively cheap, but Global-e is a high-growth company with enormous future potential, which is why its shares command a higher price. This is a great opportunity to buy shares and benefit as Global-e’s share price continues to rise.

Is it worth investing $1,000 in Global-E Online now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Jennifer Saibil holds positions at Global-E Online. The Motley Fool covers and recommends Amazon, Apple, Global-E Online, Shopify and Wix.com. The Motley Fool recommends Crocs. The Motley Fool has a disclosure policy.