The rise of global e-commerce is transforming how retailers reach customers, breaking down barriers of geography and logistics. Behind this surge, specialized platforms are enabling merchants to expand internationally with seamless digital storefronts and cross-border delivery. In today’s FA Alpha Daily, we’ll look at how one of these providers is well-positioned to capture outsized upside as digital commerce continues to accelerate.
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The Internet has radically transformed global retail over the past decade. Thanks to the rapid digitization of modern life, consumers can purchase goods and services with a simple tap of a button regardless of where they are in the world.
This rapid digitization has also been a boon for retailers, enabling them to sell goods to consumers without relying on physical storefronts.
With more than five billion Internet users worldwide, hundreds of millions of digital transactions take place each day. As a result, e-commerce sales are forecasted to exceed $4.3 trillion worldwide this year as more consumers continue to rely on digital purchases.
As adoption widens and more transactions take place, merchants will need access to e-commerce solutions to power their digital storefronts and process online transactions domestically and across borders. More importantly, these businesses will need access to reliable international logistics to ensure consumers receive the goods they paid for in a timely manner.
Global-E Online (GLBE), provides businesses with cross-border digital commerce solutions.
Founded in 2013, the company provides businesses with a wide array of e-commerce solutions through its Global-E Commerce platform. A majority of the firm’s clients are clothing and apparel companies, with notable names such as Hugo Boss, Hackett London, and Marc Jacobs forming part of its client portfolio.
Global-E Online’s e-commerce platform enables retailers to grow their international footprint by providing customers with a localized digital shopping experience in over 200 locations worldwide.
Moreover, the platform provides merchants with a suite of e-commerce-related solutions. This includes end-to-end international logistics support, risk management, regulatory and tax compliance, management tools, global market dataset and analytical tools, and digital marketing tools, and others.
Since going public in 2021, Global-E Online’s Uniform return on assets (“ROA”) has remained at 60%+ levels, delivering 67% ROA last year together with a Uniform asset growth of 24%.
Yet despite a strong showing, the company only trades at a modest Uniform P/E of 16.5x, well below corporate averages.
This valuation indicates investor uncertainty around competition and global macroeconomic and e-commerce trends. However, as consumer dependence on e-commerce continues to grow and demand for seamless international shipping grows with it, this company is well-positioned to take advantage of these tailwinds.
With its cross-border e-commerce platform, Global-E Online could maintain its ability to generate strong returns and provide investors with compelling upside potential.
Best regards,
Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research
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