Forget Amazon, GigaCloud stock price is firing on all cylinders
Amazon (NASDAQ) stock price has done well in the past 12 months, helped by the strong growth of its cloud and retail businesses. It has jumped by over 70% in this period, which has helped to propel Jeff Bezos wealth to over $196 billion.
However, a smaller competitor known as GigaCloud Technology (GCT) is doing much better. It has risen by 586% in the past 12 months and 100% this year alone. This surge has pushed its total valuation to over $1.47 billion, making it one of the best-performing companies in Wall Street.
GigaCloud is growing
The main reason why the GigaCloud stock price is soaring is that the company’s revenue growth is gaining steam because of its differentiated offerings and M&A.
Its financial results showed that the company’s revenues jumped from over $122 million in 2019 to over $703 million in 2023. That performance was both organic and because it acquired Noble House and Apexis
The company has also continued seeing strong users in its ecosystem. Its active third-party sellers have grown from 382 in 2021 to over 815 in 2023. The number of active buyers in its marketplace rose from 3,566 in 2021 to 5,010 in December.
For starters, GigaCloud is a company that provides e-commerce solutions in a different way than Amazon. It focuses primarily on bulky products which are bought from suppliers in Asia, especially in China. The average spend per buyer is $116k.
As such, it is a business-to-business company that also provides a marketplace and other logistics solutions. Its marketplace connects buyers and sellers while its GigaCloud IP generates sales through the sale of its inventory on its marketplace.
The other revenue source is its off-platform e-commerce business, which makes money by selling products in third-party marketplaces like Amazon and eBay.
Therefore, GigaCloud stock price is soaring as investors anticipate more revenue growth in the coming months. They also believe that the company will continue growing its profitability.
GigaCloud made a net profit of $2.9 million in 2019 and $94.1 million in 2023 and this trend may continue. Analysts expect that its annual revenue will soar to $1.1 billion this year and $1.32 billion in 2025. Its earnings per share will rise to $2.9 and $3.2 in that period.
Still, there are risks for investing in GigaCloud. For one, there is a risk that the tensions between the US and China will escalate in the long term. We have just seen Congress pass a law to ban TikTok.
There are other geopolitical risks such as the Uygur Forced Labor Prevention Act that seeks to punish companies offering products from Xinjiang. There are also auditing risks since its auditor is located in China.
GigaCloud stock price forecast
Turning to the daily chart, we see that the GCT stock price has been in a strong bull run in the past few months. This rally faded recently but the stock remains above the 50-day and 100-day moving averages. The MACD and the Relative Strength Index (RSI) have all pointed upwards.
Therefore, the outlook for the stock is extremely bullish, with the next point to watch being the year-to-date high of $45.15.
The post Forget Amazon, GigaCloud stock price is firing on all cylinders appeared first on Invezz
