GigaCloud (GCT) stock is firing on all cylinders: is it still a buy?

GigaCloud (NASDAQ: GCT) stock price continued its strong rally on Thursday after the company published stellar financial results. It rose by 1% in the pre-market session, reaching a high of $40, its highest point since March 15th.

GigaCloud Technology’s business continued booming in Q1 as the company became more popular among businesses. Its revenue soared by 96.5% in Q1 to over $127.8 million, easily beating its forward guidance.

It also expanded its gross margins to $26.5% while the net income soared by 71.1% to $27.2 million. Most importantly, its Gross Merchandise Value (GMV) jumped to $907 million while the number of active buyers and sellers rose to 5,493 and 865, respectively.

GCT’s management expects that its revenue growth will accelerate in Q2. It believes that the figure will be between $265 million and $280 million, a big increase from the $153 million that it made in the same quarter in 2023. In a statement, the CEO said:

For starters, GigaCloud Technology is a Chinese company that aims to disrupt the e-commerce industry. Its primary service is that it offers a business-to-business platform where people can buy bulky items from Chinese manufacturers and other suppliers.

In addition to its marketplace, the company also provides other solutions to simplify the process. For example, its marketplace has a payment and logistics solution that makes it easy for people to buy and receive their goods.

GigaCloud operates in a highly competitive industry that is dominated by leading companies like Alibaba that makes billions of dollars every quarter. However, it has proven that it can capture market share, especially in the bulky items category. 

As a result, its revenue growth has been stellar over the years. It made over $122.3 million in revenue in 2019 and $703 million in 2023. Analysts expect its revenue will soar to over $1.1 billion this year followed by $1.32 billion in 2025.

That explains why the GCT stock price has been in a strong bull run since 2023. It has jumped by over 740% from its lowest point in 2023 and by 645% in the past 12 months. Nvidia, on the other hand, has risen by 210% in the same period.

GCT chart by TradingView

The GCT share price continued soaring as I predicted in my last article in April. It has now jumped above $38.98, its highest point on April 24th. As a result, it has constantly remained above all moving averages, which is a positive sign.

I suspect that the stock will continue rising, with the next point to watch being at $45. That is an important level since it will form a double-top pattern. A move above that level will point to more upside as buyers target its all-time high of $62.

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