GigaCloud Technology | The Future Is Sunny, But Clouds Are Possible
Current Price – $30.33
Target Price – $52.33
Growth Potential – 72.4% 🔥
Investment Time – 1 Year
☁️GigaCloud Technology is a technology company headquartered in Hong Kong. It provides a platform that connects manufacturers, mainly Asian ones, with resellers in the US, Europe and Japan. The company takes care of the entire supply chain. GigaCloud shares have shown impressive growth (+273.76%) and are still significantly undervalued. The fair value of the shares is $52.3, upside is 72.4%.
Investment Theses
🔼Strong financials.
GigaCloud demonstrates high business growth rates. According to the company's financial statements, revenue for Q1 2024 increased by 96.5% y/y and reached $251.1 million. Net income increased by 71.1% to $27.2 million, and earnings per share (EPS) amounted to $0.66, which is 69.2% higher than a year earlier. The data turned out to be significantly better than market expectations. In Q2 2024, GigaCloud expects revenue to be in the range of $265-280 million. Considering how much the previous figures exceeded the forecasts, we can say that this is a very conservative estimate.
🔼Attractive valuation.
Despite outstanding financial performance, the company is quite lowly valued by the market. Its shares are trading at only 7.8 expected annual earnings, which is significantly lower than the sector average.
🔽Risks.
Since most of the company's employees and suppliers are located in China, a key risk for the company's stock is a possible deterioration in relations between China and the United States. Geopolitical tensions around Taiwan could be a trigger for such a deterioration.
Current Price – $30.33
Target Price – $52.33
Growth Potential – 72.4% 🔥
Investment Time – 1 Year
☁️GigaCloud Technology is a technology company headquartered in Hong Kong. It provides a platform that connects manufacturers, mainly Asian ones, with resellers in the US, Europe and Japan. The company takes care of the entire supply chain. GigaCloud shares have shown impressive growth (+273.76%) and are still significantly undervalued. The fair value of the shares is $52.3, upside is 72.4%.
Investment Theses
🔼Strong financials.
GigaCloud demonstrates high business growth rates. According to the company's financial statements, revenue for Q1 2024 increased by 96.5% y/y and reached $251.1 million. Net income increased by 71.1% to $27.2 million, and earnings per share (EPS) amounted to $0.66, which is 69.2% higher than a year earlier. The data turned out to be significantly better than market expectations. In Q2 2024, GigaCloud expects revenue to be in the range of $265-280 million. Considering how much the previous figures exceeded the forecasts, we can say that this is a very conservative estimate.
🔼Attractive valuation.
Despite outstanding financial performance, the company is quite lowly valued by the market. Its shares are trading at only 7.8 expected annual earnings, which is significantly lower than the sector average.
🔽Risks.
Since most of the company's employees and suppliers are located in China, a key risk for the company's stock is a possible deterioration in relations between China and the United States. Geopolitical tensions around Taiwan could be a trigger for such a deterioration.
