GigaCloud Technology Inc. GCT will report its third-quarter 2024 results on Nov. 7, after the bell.

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The Zacks Consensus Estimate for earnings in the to-be-reported stands at 67 cents, indicating 13.6% growth from the year-ago reported quarter. The consensus estimate for revenues is pegged at $279.4 million, implying 56.8% 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 40.4%.

GCT’s Lesser Chance of Q3 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 Q3

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 $84.7 million, indicating 64.6% year-over-year growth. The consensus mark for product revenues is pegged at $149.7 million, indicating 18.2% year-over-year growth.

GCT Stock in Correction Phase

GCT has rallied 25.4% year to date while plummeting 42.8% in the past six months and 16.2% in the past month. These price dynamics suggest that the stock is in a correction phase.

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When we compare GCT's performance to its close competitors, the results are intriguing. While Revolve Group RVLV has seen a 57% rise, Beyond BYON has suffered a 77% decline year to date.

Investment Considerations

GCT merges its supplier-fulfilled retailing business model with advanced research and development to enhance its robust cloud infrastructure. This strategy offers a superior B2B selling and sourcing experience in the marketplace. Addressing the demand for large parcel merchandise, GCT saw significant growth in GigaCloud Marketplace GMV, sales volume, and the number of buyers and sellers.

Sales surged 103% year over year in the second quarter of 2024, with GMV rising 80.7%. Active buyers and third-party sellers grew 66.8% and 39.8% year over year, respectively. GCT launched Branding-as-a-Service (BaaS) to help sellers improve product competitiveness. By expanding its supplier base to Colombia, Mexico, and Turkey, GCT has increased product diversity. The company also expanded its global fulfillment network to better support its growing marketplace demand.

Hold Off 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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