1) GigaCloud Technology Inc. (NASDAQ:GCT)
Short % of Float (As of 30 August 2024): 30.51%
Forward P/E as of 23 September 2024: 4.93x
GigaCloud Technology Inc. (NASDAQ:GCT) is engaged in offering end-to-end B2B e-commerce solutions for large parcel merchandise in the US and internationally.
Short sellers believe that GigaCloud Technology Inc. (NASDAQ:GCT)’s stock might be impacted as a result of gross margin pressures because of new warehouse additions, that normally take 4 – 6 months to become fully operational. Moreover, the seasonality and industry headwinds might weigh over the company’s top line in the upcoming quarters. Earlier, its margins were temporarily impacted by the costs related to new fulfillment centers and foreign exchange fluctuations. Also, there were sectoral headwinds related to the cooling of the housing market and lower consumer spending on durable goods.
On the other hand, Wall Street analysts believe that GigaCloud Technology Inc. (NASDAQ:GCT) is expected to be aided by diverse strategies and efficient supply chain management. These factors should help the company continue its growth trajectory. Market experts opine that GigaCloud Technology Inc. (NASDAQ:GCT) might witness continued growth from both organic and inorganic sources. These include further integration of the Noble House business and expansion of the B2B marketplace, Also, the company signed fixed-rate contracts to mitigate the effect of freight rates on gross margins.
GigaCloud Technology Inc. (NASDAQ:GCT) continues to focus on strategic mergers and acquisitions to drive volume growth and expand its ecosystem. Notably, the integration of Noble House SKUs and the roll-out of BaaS offering have been successful, and the latter has been receiving strong interest from sellers.
The demand for the company’s marketplace remains robust, evidenced by a ~40% rise in seller growth, touching 930 suppliers. Market experts believe that this should increase as GigaCloud Technology Inc. (NASDAQ:GCT) continues to execute its strategies. This expansion should help boost its Gross Merchandise Value (GMV), which in turn, might lead to revenue and earnings growth.
Lake Street Capital covered the shares of GigaCloud Technology Inc. (NASDAQ:GCT), giving a “Buy” rating with a price target of $50.00. The company was part of 5 hedge funds’ portfolios at the end of 2Q 2024, as per Insider Monkey’s database of 912 hedge funds.
While we acknowledge the potential of GCT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
