We came across a bullish thesis on Global-E Online Ltd. (GLBE) on Substack by Steve Wagner. In this article, we will summarize the bulls’ thesis on GLBE. Global-E Online Ltd. (GLBE)’s share was trading at $43.77 as of Feb 26th. GLBE’s forward P/E was 128.21 according to Yahoo Finance.
A close-up of a customer placing an order using the company’s e-commerce platform.
Global-e (GLBE) closed 2024 with a record-breaking fourth quarter, delivering its strongest results yet and achieving GAAP profitability for the first time as a public company—a significant milestone. The company’s revenue surged 42% year-over-year to $262.9 million, while gross merchandise value (GMV) climbed 44% to $1.71 billion. Adjusted EBITDA jumped 62% to $57.1 million, pushing the adjusted EBITDA margin above 20%, a target originally set at IPO. Free cash flow was strong at $128.8 million, contributing to a solid cash position of $438.1 million. However, despite these outstanding results, the market reacted negatively, largely due to guidance concerns for 2025.
For the full year, GLBE demonstrated robust growth across key metrics, with GMV rising 37% to $4.86 billion and revenue up 32% to $752.8 million. Adjusted EBITDA expanded 52% to $140.8 million, and net losses shrank significantly from $133.8 million in 2023 to $75.5 million. The company’s trajectory toward sustained profitability is clear, underpinned by strong operational execution and expanding partnerships. GLBE continues to deepen its footprint with major merchants like Logitech, Spanx, and Tom Ford, while also strengthening its Shopify Managed Markets initiative, a key growth driver for its cross-border e-commerce solutions.
Despite these positives, the market focused on headwinds in 2025 guidance. The most pressing concern is a projected decline in take rates, from 15.5% in 2024 to 14.9% in 2025, due to a shift toward multi-local fulfillment and 3B2C (business-to-business-to-consumer) models. Rising tariffs and global trade uncertainty are prompting merchants to alter their logistics strategies, reducing GLBE’s revenue capture per transaction. Larger merchants also tend to negotiate lower take rates, adding further pressure. While some analysts believe management is being overly cautious, the company noted that merchant behavior is already evolving in response to shifting trade policies, making the take rate compression a real concern.
A key topic of debate is the impact of potential U.S. tariff increases and changes to the de minimis rule, which could make cross-border e-commerce more expensive. Merchants may respond by restructuring supply chains, either leaning more on multi-local fulfillment or scaling back international expansion. However, GLBE’s management believes these challenges will ultimately benefit the company in the long run. As trade complexity increases, merchants will need experts like GLBE to navigate evolving logistics and regulatory landscapes. This shift could drive greater demand for GLBE’s services, positioning it as an essential partner for cross-border sellers.
In the near term, Q1 2025 revenue guidance of $184.5 million to $191.5 million fell slightly short of analyst expectations of $192.68 million, implying a slower 29% growth rate compared to 42% in Q4. Management also referenced “normalization” in consumer demand, raising concerns that Q4’s strong results may have been driven by holiday-season factors rather than sustained momentum. Some merchants onboarded in late 2023 are highly seasonal, making it uncertain whether their Q4 strength will persist throughout 2025.
Operationally, GLBE has successfully migrated most “borderfree” merchants to its platform, though a few did not make the transition due to internal priorities. The company also lost some GMV from the bankruptcy of Ted Baker, which impacted high-margin service fee revenue. While these setbacks are minor in the grand scheme, they contribute to overall market concerns about potential revenue softness.
Despite these worries, 2024 was an exceptional year for GLBE, marked by 37% GMV growth, 32% revenue expansion, and a 52% increase in adjusted EBITDA. The stock’s sharp rally leading into earnings likely set high expectations, and even minor guidance concerns triggered a sell-off. However, the company’s achievement of GAAP profitability in Q4, and the expectation of its first full year of GAAP profitability in 2025, represent a major inflection point. If GLBE continues executing well and scaling its business, long-term prospects remain bright, and the stock could see a meaningful re-rating once investor sentiment stabilizes.
Global-E Online Ltd. (GLBE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held GLBE at the end of the third quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of GLBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GLBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.