GigaCloud Technology logo displayed on a smartphone screen

key points

  • Gigacloud operates a cross-border marketplace for large parcel merchandise (such as furniture), connecting resellers and factories in Asia under its supplier-filled retailing model.
  • Gigacloud has 18.68% short interest, as the shares took a hit due to the short seller report, but when it publicly responded to its key points, the shares rebounded.
  • Giga Cloud reported improved top and bottom line performance for the first quarter of 2024 and launched its Branding-as-a-Service (BaaS) solution in the quarter.
  • 5 stocks we like better than Gigacloud Technology

Gigacloud Technology Inc. NASDAQ: GCT Provides global end-to-end business-to-business (B2B) cross-border services E-commerce Solutions for large parcel goods. Its Gigacloud marketplace platform makes product discovery a seamless experience, including payments and logistics services Connecting Asian manufacturers with resellers in the US, Europe and Asia. Shares come under scrutiny Short Seller The Grizzly Research report pointed to allegations of insider selling, delayed 10-K reports, Chinese auditors, and more. The company has since disputed the report, causing shares to jump from a low of $25.22 to $31.50.

Computer and Technology Area The company competes with B2B e-commerce platforms, including ali baba NYSE: BABA, Shopify Inc. NYSE: SHOP And eBay Inc. NASDAQ: EBAYHowever, Gigacloud focuses primarily on large parcel goods such as furniture being shipped overseas.

Here’s how Gigacloud differentiates itself in supplier fulfillment

Gigacloud Technology Inc. Stock Logo
GCTGCT 90-day performance

Gigacloud Technology

$31.76

+1.14 (+3.72%)

(as of 05/29/2024 ET)

52-week range
$6.31

$45.18

P / E ratio
12.36

Price Targets
$52.00

The traditional retail fulfillment model for large parcel merchandise has many challenges due to the many different parties and touchpoints between the factory and the end customer. The traditional model requires the factory to deliver the product to the distributor, who sends the product to the retailer and reseller, who sends the last mile of the product to the end customer. With the GigaCloud supplier fulfilled retailing model, the factory sends the merchandise to GigaCloud, which handles fulfillment and logistics directly to the end customer. The distributor and reseller let GigaCloud handle the logistics. Most of GigaCloud’s employees are located near the company’s factories in China and Southeast Asia.

Daily Descending Triangle Pattern on Gigacloud Technology Remains Resilient

Gigacloud Tech (GCT) launches a daily newsletter Descending Triangle Pattern Initially it looked like it would break out, but shares were so resilient that they pulled back into the triangle range. The descending trendline formed at $41.10, which prevents a bounce lower toward the flat-bottom trendline at $30.75. GCT is trading back within the triangle, but the top point is approaching, where it must make a decision. GCT could break the descending trendline or break below the flat-bottom trendline at $30.75. Daily Relative Strength Index (RSI) is attempting to bounce off the 40-band. Pullback support levels are at $28.16, $26.45, $22.36, and $20.20.

Gigacloud Stock Chart

Impressive Q1 2024 earnings report for Gigacloud

On May 9, 2024, Gigacloud reported EPS of 66 cents, 15 cents above analysts’ expectations. Revenue grew 96.5% to $251.1 million. Gross profit was $66.5 million, up 124.7% from the prior year. Gross margin increased 340 bps to $26.5. Net income increased 71.1% to $27.2 million. Net income margin fell 160 bps to 10.8%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 74.2% to $34.5 million. The Company had $196.2 million in cash, restricted cash, and investments at the end of the quarter.

Quarterly Highlights

Gigacloud Marketplace gross merchandise value (GMV) grew 64% year over year to $907.7 million. GMV is a measure of the total value of all transactions in a quarter. Active 3P sellers grew 43% year over year to 865. Active buyers grew to 5,493. Spend per actual buyer grew 127% to $165,239. Gigacloud expects Q2 2024 total revenue to be between $265 million and $280 million.

Gigacloud’s Branding-as-a-Service (BaaS) Introduction

The company launched Branding-as-a-Service (BaaS) Marketplace, a pivotal point for the furniture industry by Gigacloud. The program enables qualified sellers to leverage the Christopher Knight Home brand to address brand building challenges in the furniture sector.

CEO Insights

Gigacloud CEO Larry Wu reported that despite daunting challenges such as soft consumer spending and an 8% year-on-year decline in retail furniture sales, the company achieved results that were nearly double the same period last year. Gigacloud also achieved significant improvements in key financial and operational metrics. The company continues to integrate and assimilate the Wondersign and Noble House acquisitions. It expanded its supplier base in Colombia, Turkey and Mexico.

Commenting on their BaaS launch, Wu said, “So basically branding as a service is an additional service that is being offered to make the business model even more attractive to both our seller base and buyer base and the whole idea behind this process is that through an end-to-end optimization process, we are able to manage the entire process across the network, which contributes to all the margins that you just listed as third-party sellers.”

Gigacloud Technology analyst ratings and price targets are on MarketBeat.

You might want to hear this before considering Gigacloud technology.

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