GigaCloud technology presents BaaS for the B2B market

GigaCloud Inc. Technology NASDAQ:GCT provides global, end-to-end business-to-end (B2B) cross-border e-commerce solutions for large shipments. The GigaCloud Marketplace enables product discovery across payment and logistics services, connecting Asian manufacturers with resellers in the US, Europe and Asia. The stock has come under scrutiny following a Grizzly Research short-selling report that highlighted insider selling, a delayed $10K report. shares, Chinese auditors and various accusations. The company has since disputed the report, causing the stock to rebound from a low of $25.22 to $31.50.

The computer and technology company competes with B2B e-commerce platforms, including: Ali Baba NYSE: BABA, Shopify Inc. NYSE: SHOP AND eBay Inc. NASDAQ: EBAY. However, GigaCloud primarily focuses on large-package goods, such as furniture shipped abroad.

Here’s what sets GigaCloud apart when it comes to supplier fulfillment

The traditional large package retail fulfillment model presents many challenges due to the many different parties and touchpoints between the factory and the end customer. The traditional model requires the factory to transport the product to a distributor, who ships the product to the retailer, and to the retailer, who ships the last mile of the product to the end customer. With the GigaCloud vendor-led retail model, the factory ships the goods to GigaCloud, which handles fulfillment and logistics directly to the end customer. Distributors and resellers let GigaCloud take care of the logistics. Most of GigaCloud’s employees are located near the company’s factories in China and Southeast Asia.

GigaCloud’s daily descending triangle pattern remains resilient

GigaCloud Tech (GCT) formed a daily descending triangle pattern that initially looked like it was about to break down, but the stock was resilient enough to rebound to the triangle range. A descending trendline has formed at $41.10, capping the bounce from lower higher levels towards a flat trendline at $30.75. GCT is trading back within the triangle, but the high point is approaching where it will have to make a decision. GCT could break the downtrend line or fall below the flat trendline at $30.75. The daily relative strength index (RSI) is trying to recover near the 40 band. Pullback support levels are $28.16, $26.45, $22.36 and $20.20.

GigaCloud’s Impressive Q1 2024 Earnings Report

On May 9, 2024, GigaCloud reported EPS of 66 cents, beating analyst expectations by 15 cents. Revenues increased 96.5% y/y to $251.1 million. Gross profit was $66.5 million, up 124.7% year over year. Gross margin increased 340 bps to $26.50. Net profit increased by 71.1% to $27.2 million. Net profit margin declined 160 basis points to 10.8%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 74.2% y/y to $34.5 million. At the end of the quarter, the company had $196.2 million in cash, restricted cash and investments.

Quarterly highlights

GigaCloud Marketplace gross merchandise value (GMV) increased 64% year-over-year to $907.7 million. GMV is a measure of the total value of all transactions in a given quarter. The number of active 3P sellers increased 43% YoY to 865. The number of active buyers increased to 5,493. Spend per actual buyer increased 127% to $165,239. GigaCloud expected total revenue in the second quarter of 2024 to be between $265 million and $280 million.

An introduction to GigaCloud branding as a service (BaaS).

The company launched Branding-as-a-Service (BaaS) as a marketplace service, marking a turning point for the furniture industry with GigaCloud. The program enables qualified sellers to leverage the Christopher Knight Home brand to address branding challenges in the furniture sector.

CEO insights

GigaCloud CEO Larry Wu noted that despite challenging factors such as reduced consumer spending and an 8% YoY decline in furniture retail sales, the company nearly doubled its results from the prior-year period. GigaCloud also achieved significant improvements in key financial and operational metrics. The company continues to integrate and assimilate its Wondersign and Noble House acquisitions. It expanded its supplier base to include Colombia, Turkey and Mexico.

Wu commented on the introduction of BaaS: “Essentially, branding as a service is an additional service offered to further solidify the business model. Both our seller and buyer base, and the whole idea behind this process is that through a comprehensive optimization process, we are able to manage the entire process on the network, which kind of contributes to all the margins that we just mentioned when it comes to sellers external.”

GigaCloud Technology’s analyst ratings and price targets are available on MarketBeat.

Before you consider GigaCloud technology, you’ll want to hear this.

Every day, MarketBeat tracks Wall Street’s top-rated and best-performing analysts and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market adopts them… and GigaCloud wasn’t on the list.

Although gigaCloud Technology currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better picks.

See five stocks here