GigaCloud Technology Inc (NASDAQ: GCT)

Sector: Technology Industry: Software - Infrastructure CIK: 0001857816
Market Cap 1.62 Bn
P/B 3.55
P/E 12.51
P/S 1.33
ROIC (Qtr) 12.28
Div Yield % 0.00
Rev 1y % (Qtr) 9.67
Total Debt (Qtr) 461.67 Mn
Debt/Equity (Qtr) 1.01

About

GigaCloud Technology Inc. (GCT), a prominent name in the global B2B e-commerce industry, has been instrumental in revolutionizing large parcel merchandise transactions. The company operates under the GigaCloud Marketplace, a comprehensive platform that amalgamates product discovery, payments, and logistics tools into a single, user-friendly interface. GCT's primary role involves seamlessly connecting manufacturers, predominantly based in Asia, with resellers primarily situated in the U.S., Asia, and Europe, thereby facilitating cross-border transactions...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 194.71M provides robust 0.42x coverage of total debt 461.67M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 335.55M provide 3.36x coverage of short-term debt 99.89M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 194.71M provides exceptional 1256.19x coverage of interest expenses 155000, showing strong debt service capability.
  • Operating cash flow of 194.71M provides strong 33.30x coverage of stock compensation 5.85M, indicating sustainable incentive practices.
  • Robust free cash flow of 188.58M exceeds capital expenditure of 6.13M by 30.78x, indicating strong organic growth funding capability.

Bear case

  • Investment activities of 2.19M provide weak support for R&D spending of 10.57M, which is 0.21x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of 188.58M represents just -447.94x of debt issuance (421000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • R&D investment of 10.57M represents just 0.08x of SG&A expenses of 139.72M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Operating cash flow of 194.71M is outpaced by equity issuance of (80.62M) (-2.42 ratio), indicating concerning reliance on equity markets for funding operations.
  • Other non-current assets of 25.41M provide minimal coverage for long-term debt of 361.78M, which is 0.07x, indicating potential asset-liability mismatch.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.65 2.69
EV to Cash from Ops. EV/CFO 9.51 28.91
EV to Debt EV to Debt 4.01 19.83
EV to EBIT EV/EBIT 12.51 -9.95
EV to EBITDA EV/EBITDA 12.47 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 9.82 26.09
EV to Market Cap EV to Market Cap 1.14 0.36
EV to Revenue EV/Rev 1.51 -9.34
Price to Book Value [P/B] P/B 3.55 3.88
Price to Earnings [P/E] P/E 12.51 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 955.05 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 60.31 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 53.69 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.57 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -14.83 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -3.51 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -3.40 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 5.03 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 50.92 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.54 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.09 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 1.12 1.22
Current Ratio Curr Ratio (Qtr) 2.08 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.01 -0.96
Interest Cover Ratio Int Coverage (Qtr) 955.05 -14.20
Times Interest Earned Times Interest Earned (Qtr) 955.05 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.40 -548.16
EBIT Margin % EBIT Margin % (Qtr) 12.10 -199.84
EBT Margin % EBT Margin % (Qtr) 12.09 -607.20
Gross Margin % Gross Margin % (Qtr) 23.10 51.88
Net Profit Margin % Net Margin % (Qtr) 10.60 -610.00