Naughty and Nice ER Review: GLBE

Investing Strategies Abandoned Arctic Outpost #13
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Updated Naughty and Nice Lists and Rankings:

A) NICE LIST

  1. BILL

  2. DDOG

  3. CRWD

  4. S

  5. GTLB

  6. ZI

  7. AFRM

  8. APP

  9. MELI

B) PURGATORY LIST

  1. UPST

  2. TTD

C) NAUGHTY LIST

  1. NET

  2. CFLT

  3. U - Replaces AMPL in the #3 Naughty Ranking

  4. AMPL

  5. MNDY - Newly arrived and settling in.

  6. BROS

  7. TWLO

  8. FVRR
    …

Global-e Online Ltd - Platform Bridge Over International Complicated Transaction and Tax Waters.

https://www.global-e.com/

A Few Data Points:

Current Price: $19.18
Range: 15.87 - 83.77
About 77% Below its Glorious High.
Market Cap: $2.98B (Looks a lot like less tomorrow)
EV/Revenue: 9.71
YTD Momentum: -70%
…

GLBE Reported Q1 2022 Today:

https://seekingalpha.com/news/3839447-global-e-online-gaap-e…

The report was pretty good on the Revenue side and an ATTA BOY! up until Halftime. But then came Expenses, Margins and Guidance. All heavy OH POOPS!

The company guided for Q2 Revenue between $82.5 to 84.5M representing slowing Revenue Growth of 47% at the high end, against expectations for $90.25M. Huge OH POOP! for such a young growth company hitting the wall in only their 4th public report.

To make things worse, they then lowered FY GMV guidance as well as FY Revenue.

There was some good news in that the kept the previous guidance for EBITDA - providing a glimmer of hope.

After hours the stock is down just over 28%.

I see no reason to go thru the entire process of ATTA BOY/OH POOP Method for the company at this time.
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LIST and RANKING Assignment: Naughty #6

During the CC the company pretty much blamed the poor Guidance on the Russian invasion of Ukraine. I was in GLBE up until the last ER but got out after a nice rally based on what I thought of Organic Growth. I then eased back in up until SHOP’s sad report and took that as a cue to vamonos Muchacho. Or something like that.

The thing is that GLBE could be a nice buy here about or when/if it drops to single digits. The company was doing fine until now and if they really have been upended by the Russian invasion then once that is resolved perhaps their trajectory will revert to its previous promise.

All The Best,

2 Likes
2

the UK and Europe are a big part of their biz, and I listened to ER CC.
Mgmt was solid, as usual.

It was pretty clear this is macro headwinds for Europe from Ukraine war.
No change in guidance was due to US or UK, per mgmt.

They recently bought a company that isn’t FCF positive yet, and expect that changes as they scale that business up throughout this year. So that weighed on profit.

Rev growth is still projected at 60% plus.
I think they wanted a buffer, and even hinted on call that they could still make their original guidance. (putting them just over 70%).

Their organic biz is growing.
Their Shopify integration pilot ended in April and is now live for Shopify’s largest clients.
Their Shopify integration for the Flow Commerce acquisition (the SMB stuff) comes later.

So they have 3 growth levers, all headed in right direction.

I do not know what the correct valuations are anymore, but they are a forward P/S of 5.6 at present.
Seems ok for a 60% grower, at least longer-term (12-18-24 months) but I have no idea in the short-term if it will go any lower.

Best thing that could happen for GLBE is to catch a bear rally soon, keeping them from getting beaten down too much more. I note this feels like UPST which sank to the 27 and now at 37. So it is possible GLBE at $14 is a great price. Dunno.

But I bought some in AH.

Dreamer

1 Like
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Dreamer:

Good Thoughts.

I am tempted to pick up shares again but am caught between the questions of the general market and the potential for a recession and the tight concentration of the roster. Promising that we didn’t give all of Friday’s Bear rally back today - so there’s that.

Your opinions are always valuable.

All the Best,

4

Sold GLBE TB bought at $14 yesterday for a 38% gain.

Wonder who I learned that TB trick from?

:slight_smile:

Dreamer

5

Dreamer:

Nothing but Net from the deep corner and very nicely done!

All the Best,