Global-e Online Shares Dip Below IPO Price, Finding Support

Jun. 23, 2022 11:09 AM ETGlobal-e Online Ltd. (GLBE)5 Comments2 Likes

Summary

  • Global-e Online has been a rough ride since its $25 IPO in May 2021.
  • After more than tripling in a few months, the stock has fully round-tripped.
  • Two recent acquisitions present opportunities and risks while the stock price hovers below the IPO price.
  • Near-term support offers a swing-long opportunity.

Woman online shopping on smart phone fashion clothes at home

oatawa/iStock via Getty Images

Global-e Online Ltd. (NASDAQ:GLBE) is a $3 billion market cap internet & direct marketing retail company in the consumer discretionary sector. According to Fidelity Investments, the company and its subsidiaries provide "a platform to enable and accelerate direct-to-consumer cross-border e-commerce in Israel, the United Kingdom, the United States, and internationally. Its platform enables international shoppers to buy online and merchants to sell from, and to, worldwide. Global-e Online Ltd. was incorporated in 2013 and is headquartered in Petah Tikva, Israel."

The stock has endured a wild ride since its IPO last year. The $25 IPO price, according to Nasdaq.com, was a launch pad for a surge to above $83 last September after trading began just 13 months ago. The stock has fully round-tripped... and then some. Shares currently trade under $20 but may have found a floor. I'll detail that later.

Fundamentally, GLBE features negative earnings per share looking out to next year and 2024. The company does not pay a dividend and its free cash flow yield is paltry. Moreover, its enterprise value to EBITDA ratio is sky-high around 70x right now, though analysts at Bank of America Global Research expect that to drop in the coming two years.

Global-e Earnings Estimates & Valuation

Global-e Earnings Estimates & Valuation

BofA Global Research

The upshot is that Global-e is expanding its U.S. presence. BofA notes that the company acquired Borderfree, a subsidiary of Pitney Bowes for $100 million in an all-cash deal. That's the second big acquisition already in 2022 - Global-e bought Flow Commerce in January for $500 million. Amid these acquisitions, execution risks are high. Still, BofA places a $30 price target on its shares based on an EV/gross multiple valuation. They cite risks from the deals, tough pandemic comps, and continued supply chain issues, among others.

The stock recently reported a $0.35 per share loss in its Q1 2022 earnings report, below analyst expectations of $-0.056, according to First Call Consensus.

Global-e Research Highlights: Earnings Miss

Global-e Research Highlights: Earnings Miss

Fidelity Investments

Looking ahead, the corporate event calendar is somewhat light for GLBE. There was a technology conference slated for later this month, but after digging, I found that Jefferies moved that event to September. So keep your eye out for potential market-moving news at that event in three months. The next earnings date is unconfirmed for August 16 AMC, according to data provider Wall Street Horizon.

Corporate Events: Q2 Earnings Date & Jefferies Conference

Corporate Events: Q2 Earnings Date & Jefferies Conference

Wall Street Horizon

The Technical Take

Turning to the charts, something I specialize in, it doesn't take words to tell how bad the story has been. The drawdown off the 2021 peak is more than 75%. Making the drop even harsher is that it traded in a range from about $50 to above $80 for just about the entire second half of last year. There are many so-called "dead bodies" in that range. That is tough long-term resistance.

Near-term, however, I see a tradable bottom. There's support in the $15.87-16.80 range. That area, tested three times since early May, continues to hold. I'd like to see GLBE climb above $24 to confirm that low - also keep in mind the psychologically-important IPO price is just above that. If we do breakout above the mid-$20s a longer-term target to the prior range-base in the upper $40s could be in-play.

GLBE Since Its IPO: Support Zone With Resistance Levels

GLBE Since Its IPO: Support Zone With Resistance Levels

Stockcharts.com

The Bottom Line

GLBE is another sad IPO story of 2021. Free cash flow is weak, and the valuation is still expensive. It's not all doom and gloom, though. I see support on the chart. The bulls might be gathering steam below the IPO price right now. A swing long trade here with a stop under the May low makes sense to me.

This article was written by

CFA & CMT Charterholder | Freelance Financial Writer at SoFi & Ally | Investments | Markets | Personal Finance | RetirementI create written content used in various formats including blogs, emails, white papers, and social media for financial advisors and investment firms in a cost-efficient way. My passion is putting a narrative to financial data. Working with teams that include senior editors, investment strategists, marketing managers, data analysts, and executives, I contribute ideas to help make content relevant, accessible, and measurable. Having expertise in thematic investing, market events, client education, and compelling investment outlooks, I relate to everyday investors in a pithy way. I enjoy analyzing stock market sectors, ETFs, economic data, and broad market conditions, then producing snackable content for various audiences. Macro drivers of asset classes such as stocks, bonds, commodities, currencies, and crypto excite me. I truly enjoy communicating finance with an educational and creative style. I also believe in producing evidence-based narratives using empirical data to drive home points. Charts are one of the many tools I leverage to tell a story in a simple but engaging way. I focus on SEO and specific style guides when appropriate. My CFA and CMT backgrounds demonstrate prowess in investment management and my professional experience includes extensive public speaking and communication. Moreover, my extensive university teaching and professional trading experience provide useful skills. Past roles also include heavy use of Excel modeling and chart creation as well as PowerPoint.I am a contributor to The Dividend Freedom Tribe. I am a contributor to Topdown Charts.
Follow

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (5)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.