$GigaCloud Technology (GCT.US)$ Up 512%, This Growth Stock S...
Up 512%, This Growth Stock Still Looks Cheap
GigaCloud’s Q4 earnings reporthighlighted the scale of the company’s growth over the past year. Total revenues were $244.7 million in the fourth quarter of 2023, an increase of 94.8% from $125.6 million in the fourth quarter of 2022. Meanwhile, its gross profit was $69.8 million in the fourth quarter of 2023, an increase of 161.4% from $26.7 million in Q4 of 2022. Additionally, net income was up 161.4% at $69.8 million.
The company has also seen its margins strengthen during the period. Its gross margin increased to 28.5% in the fourth quarter of 2023 from 21.2% in the fourth quarter of 2022. Meanwhile, its net income margin jumped to 14.5% in the fourth quarter of 2023 from 9.9% in the fourth quarter of 2022.
With earnings and margins improving at such an impressive rate, GigaCloud continues to have some strong and attractive valuation metrics. In fact, it looks pretty cheap. The stock is currently trading at 12.7x forward earnings. Given the projected earnings, this price-to-earnings ratio is expected to fall to 10.1x in 2025 and 8.1x in 2026. While I realize that Chinese and Chinese-linked companies tend to trade at discounts to the wider market, I still think this stock presents good value.
GigaCloud’s Q4 earnings reporthighlighted the scale of the company’s growth over the past year. Total revenues were $244.7 million in the fourth quarter of 2023, an increase of 94.8% from $125.6 million in the fourth quarter of 2022. Meanwhile, its gross profit was $69.8 million in the fourth quarter of 2023, an increase of 161.4% from $26.7 million in Q4 of 2022. Additionally, net income was up 161.4% at $69.8 million.
The company has also seen its margins strengthen during the period. Its gross margin increased to 28.5% in the fourth quarter of 2023 from 21.2% in the fourth quarter of 2022. Meanwhile, its net income margin jumped to 14.5% in the fourth quarter of 2023 from 9.9% in the fourth quarter of 2022.
With earnings and margins improving at such an impressive rate, GigaCloud continues to have some strong and attractive valuation metrics. In fact, it looks pretty cheap. The stock is currently trading at 12.7x forward earnings. Given the projected earnings, this price-to-earnings ratio is expected to fall to 10.1x in 2025 and 8.1x in 2026. While I realize that Chinese and Chinese-linked companies tend to trade at discounts to the wider market, I still think this stock presents good value.
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