GigaCloud Technology Inc (GCT) experienced a pre-market plunge of 16.18% on Tuesday, following the release of its fourth-quarter earnings results and disappointing guidance for the upcoming quarter.
The company reported adjusted earnings per share of $0.75 for the fourth quarter, falling short of analysts' expectations of $0.90. While revenue increased by 20.9% year-over-year to $295.8 million, exceeding estimates, the company's gross margin declined to 22%, down from 28.5% in the same period last year, raising concerns about profitability pressure.
However, the primary catalyst for the stock's steep decline appears to be GigaCloud's weak guidance for the first quarter of 2025. The company expects revenue to be in the range of $250 million to $265 million, significantly lower than the consensus estimate of $281.4 million. This disappointing outlook has weighed heavily on investor sentiment.