3 Top Growth Stocks That Still Look Unstoppable
It might seem counterintuitive, but when looking for great companies to add to your portfolio, seek out stocks that have already had a solid price appreciation. Winning sports teams tend to keep on winning, and companies are no different. With that in mind, we asked three Motley Fool contributors to highlight one stock that’s already a tremendous run so far this year that they’d buy today.
They came up with Global-E Online (NASDAQ:GLBE), Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), and Datadog (NASDAQ:DDOG).
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Global-E Online: Making global e-commerce sales easier
Danny Vena (Global-E Online): There’s little doubt e-commerce has a long runway ahead. Online spending surged in the U.S. last year, growing to 19.6% of total retail sales, up 32% year over year. While growth has slowed in 2021, the trajectory is clear.
One of the headwinds for merchants, however, is dealing with the complexities of cross-border sales. Having the seller in one country and the buyer in another raises a whole litany of issues that most merchants don’t have the time or the bandwidth to deal with. That’s where Global-E Online comes in. The company handles many of the challenges and complexities that come with international selling, leaving the merchant to go about their daily routine.
The list of complications tied to cross-border sales is extensive: foreign language translation, inter-country regulatory compliance, currency exchange, customs and duties, and even preferences in local payment methods. Global-E Online makes quick work of many of the hurdles associated with international transactions.
The proof is in the pudding. For the second quarter, Global-E delivered revenue that grew 92% year over year, while its gross merchandise volume soared 95%. Gross margin expanded to 36%, up from 32.4% in the prior-year quarter. Excluding the amortization expense related to the warrants held by Shopify, Global-E swung from a loss to a profit, albeit a modest one.
As a result of its robust performance, Global-E raised its full-year guidance. The company now expects 2021 revenue of $1.36 billion at the midpoint of its guidance, up tenfold from revenue of $136 million in 2020.
Investors clearly see the opportunity and have driven Global-E Online stock up by more than 180% since its initial public offering in May.
If you’re still not convinced, don’t take my word for it. Prior to the IPO, the company announced that e-commerce platform provider Shopify purchased 7.75 million shares of Global-E Online stock, amounting to a 6.5% stake in the company. Shopify took it a step further, acquiring warrants that gave the company the right to buy an additional 11.85 million shares of stock over the ensuing 24 months.
The pair also entered into a partnership agreement that made Global-E Online the exclusive provider of cross-border services for Shopify merchants. The initial term of the agreement extends to April 2024,…