We recently published a list of the 15 NASDAQ Stocks with the Lowest P/E Ratios. In this article, we are going to take a look at where GigaCloud Technology Inc. (NASDAQ:GCT) stands against the other NASDAQ stocks.
A Revised U.S. Economic Outlook
At the start of the year, strategists and economists projected the U.S. economy to perform better in 2025 with the U.S. stock market positioned for another year of above-trend growth. Now, economic growth projections are moving slightly to the lower end of the previous forecasts.
Economic forecasting teams from Morgan Stanley, Goldman Sachs, and others revised their 2025 GDP projections lower. Morgan Stanley now projects a 1.5% growth in 2025, and Goldman expects a 1.7% growth.
The year-end targets for the S&P 500 might be too optimistic. If things go the way they are being projected, the S&P 500 will potentially underperform compared to growth in 2024, impacting the NASDAQ 100 index as well. So far in 2025, the S&P 500 has plunged over 3.30% while the NASDAQ 100 index has dropped over 5.50%, as of March 18. The first quarter is about to end and markets are volatile now with the new U.S. administration implementing its tariff policy.
The head of US equity strategy at RBC Capital Markets, Lori Calvasina, pointed out that the U.S. equity market can hold the drop if things go south.
“We have seen the U.S. equity market on a rocky path higher through year-end, and have believed that our 6,600 can absorb a 5-10% drawdown,” Calvasina wrote in a note to clients on March 9. She further added, “risks of a drawdown of more than 10% have admittedly grown, however. If that occurs, we see a ‘growth scare’ of a 14-20% decline from the peak as most likely, which could shift us into our bear case.”
President Donald Trump addressed Congress with potential disturbance to the economy from his tariff policies. In an interview with Fox Business on March 9, President Trump said:
“There is a period of transition because what we’re doing is very big … We’re bringing wealth back to America. That’s a big thing … it takes a little time, but I think it should be great for us.”
Our Methodology
To compile our list of NASDAQ stocks with the lowest P/E ratios, we first compiled a list of 40 NASDAQ listed firms with a forward P/E ratio lower than 10 and a market capitalization greater than $150 million. Then, we shortlisted the 15 stocks with the lowest P/E ratios and ranked them based on the number of hedge fund holders, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
GigaCloud Technology Inc. (NASDAQ:GCT)
Forward P/E ratio: 5.35
No. of Hedge Fund Holders: 14
GigaCloud Technology Inc. (NASDAQ:GCT) is a pioneer in worldwide end-to-end B2B technology solutions for large parcels. GCT’s B2B e-commerce platform, the GigaCloud Marketplace, offers everything from discovery to payments, and logistical technologies in one simple platform.
GigaCloud Technology Inc. (NASDAQ:GCT) posted record revenue in its history, surpassing $1 billion in total revenue for the first time. The company’s marketplace Gross Merchandise Value (GMV) soared 70% from a year ago, reaching $1.3 billion. This shows the strong demand for the company’s offerings. GigaCloud got the number one spot on Forbes America’s Most Successful Small Cap Companies 2025 list and was added to the Russell 2000 Index. The company maintains a strong balance sheet with zero debt and robust cash flow generation. This positions it well for future growth.
Despite a record performance in 2024, analysts have downgraded the price target on GCT shares. On March 4, Roth MKM analyst Matt Koranda downgraded GCT from Buy to Neutral, dropping its price target from $32 to $15. The analyst highlights that the disappointing outlook for Q1 2025 suggests a deceleration in sales combined with margin erosion. Koranda mentioned that the firm needs to show visibility into first-party sales growth, service revenue re-acceleration, and sustainable margin expansion before it is reassigned a buy rating. Lake Street analyst has also reduced the price target on GCT from $50 to $26, maintaining a Buy rating. Although the analysts have reservations, GCT is one of the cheapest stocks listed on NASDAQ with strong growth momentum.
Overall GCT ranks 10th on our list of the NASDAQ stocks with the lowest P/E ratios. While we acknowledge the potential of GCT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GCT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
