Global-E Online rallies after Morgan Stanley turns bullish

Morgan Stanley turned bullish on Global-E Online (GLBE) on its view that the durability and magnitude of the DTC e-commerce company's same-store-sales growth is being underappreciated. The stock was upgraded to Overweight on the expectation for strong sales growth and margin improvement.

Analyst James Faucette noted that Global-E Online's (GLBE) same-store-sales growth remains in the mid-teens or better, which is roughly 500 to 600 basis points above its historical range. While some modestly slower same-store sales growth is expected due to FX tailwinds fading and Canadian comparisons toughening, the firm thinks same-store-sales growth at or above the 12% level would likely provide investors with incremental confidence that GLBE can continue to generate +30% gross merchandise value growth.

"With the stock trading at ~18x '28 GAAP EPS for durable 30%+ EPS growth, we think the stock is fundamentally mispriced, and we believe that this analysis, coupled with incremental take rate disclosure from the company, more focus on gross profit growth/take rates, and ramping Managed Markets GMV, can serve as catalysts for multiple expansion," wrote Faucette.

Morgan Stanley assigned a price target of $50 to Global-E Online (GLBE).

Shares of Global-E Online (GLBE) were up 3.0% in premarket trading to $40.00.

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