GigaCloud Technology Inc. GCT will report its fourth-quarter 2024 results on March 3, after the bell.

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The Zacks Consensus Estimate for earnings in the to-be-reported stands at 90 cents, indicating 3.5% growth from the year-ago reported quarter. The consensus estimate for revenues is pegged at $290 million, implying 18.5% year-over-year growth. There has been no change in analyst estimates or revisions lately.

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The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and lagged once, with an average earnings surprise of 38.1%.

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GCT’s Lesser Chance of Q4 Earnings Beat

Our proven model doesn’t conclusively predict an earnings beat for GCT this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

GCT has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

All Round Healthy Business Should be GCT’s Driver in Q4

We expect that the significant year-over-year improvement in the company’s top line in the to-be-reported quarter will be driven by an increase in both service and product revenues. The consensus estimate for service revenues is pegged at $99.8 million, indicating 44% year-over-year growth. The consensus mark for product revenues is pegged at $149.7 million, indicating 8.4% year-over-year growth.

GCT Stock is in a Correction Phase

GCT has declined 55% over the past year against the industry’s 48% growth. When we compare GCT's performance to its close competitors, the results are intriguing. While Revolve Group RVLV has seen a 20% rise, Beyond BYON has suffered a 81% decline over the past year.

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Investment Considerations for GCT

GCT leverages its supplier-fulfilled retailing model alongside advanced research and development to optimize its cloud infrastructure. This strategic approach elevates its B2B selling and sourcing capabilities, catering to the growing demand for large-parcel merchandise.

The results of these efforts are evident. In the third quarter of 2024, GigaCloud Marketplace reported a 70.2% year-over-year surge in sales, an 80.2% increase in Gross Merchandise Value, an 85.5% rise in active buyers, and 41.8% growth in active third-party sellers. GCT’s commitment to expanding its marketplace is further exemplified by its introduction of a Branding-as-a-Service (BaaS) offering, which enhances product competitiveness for sellers.

Additionally, GCT’s efforts to diversify its supplier base, incorporating products from Colombia, Mexico and Turkey, have bolstered product variety and buyer satisfaction. Expanding its global fulfillment network ensures the company can meet rising marketplace demand effectively.

Hold Off GCT for a More Favorable Entry Point

While GCT’s current growth prospects appear robust, potential investors should consider waiting as the stock may undergo a further correction, especially when it does not seem poised for an earnings beat. GCT's long-term growth potential remains strong, making it a compelling stock to watch for the right investment opportunity.

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This article originally published on Zacks Investment Research (zacks.com).

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