Is GigaCloud's Cheap Valuation Reason Enough to Bet on the Stock?

GigaCloud Technology GCT is one of the cheaper ones in the Zacks Technology Services industry, with a Value Score of A.

Shares of this AI-driven, end-to-end B2B e-commerce solution provider are trading at a significant discount, with a forward 12-month P/S of 1.04X compared with the industry’s 2.6X. GCT is also cheaper than other technology services stocks like N-able NABL and Bitfarms BITF. N-able and Bitfarms have a Value Score of B and F, respectively.

GCT’s P/S F12M vs. Industry, NABL & BITF

GCT’s cheap valuation is attractive for investors. However, is it worth buying at current prices?  Let’s dig deep to find out.

Major Tailwinds for GCT Stock

GigaCloud Technology’s e-commerce Focus:  The ongoing expansion of e-commerce represents a significant tailwind for GigaCloud Technology. A strong 2025 holiday season, fueled by rising online sales, has supported GCT stock’s performance. The company is well positioned to benefit further in the current year as its digital services marketplace prepares for the expected acceleration in e-commerce in 2026, driven by higher online commercial activity and the continued expansion of cross-border trade. The December 2025 announcement of a 617,000-square-foot fulfillment center in New Jersey — the company’s largest to date — enhances its ability to manage growing marketplace volumes.

According to a Research and Markets report, the cross-border e-commerce market grew from $113.45 billion in 2024 to $127.31 billion in 2025. The market is projected to expand to $306.63 billion by 2032. This substantial expansion potential bodes well for GigaCloud Technology.

Commendable Expansion Efforts: Last month, GigaCloud Technology finalized the $18 million acquisition of New Classic Home Furnishings, aimed at strengthening its domestic distribution network. This acquisition also reinforces GCT’s strategy of building a channel-agnostic marketplace that improves connectivity between suppliers and retailers. Bringing in New Classic, a wholesaler with a strong brick-and-mortar focus, aligns well with GigaCloud’s objective of diversifying its operations and extending reach beyond e-commerce.

A few years earlier, GigaCloud Technology acquired furniture supplier Noble House Home Furnishings for $85 million in cash. The integration of Noble House’s supply chain and product portfolio enhanced GCT’s B2B marketplace for large-parcel goods and expanded its operational footprint in Canada.

Upbeat Earnings Surprise History: GigaCloud Technology delivered better-than-expected earnings per share in the third quarter of 2025. This earnings outperformance extended the company’s strong track record of surpassing expectations, underscoring its resilience in a challenging environment. Overall, GCT’s earnings have exceeded the Zacks Consensus Estimate in three of the past four quarters (missing once), with an average surprise of 45.6%.

GigaCloud Technology Price and EPS Surprise

GigaCloud Technology Inc. price-eps-surprise | GigaCloud Technology Inc. Quote

Rosy Price Performance: Supported by the tailwinds, shares of GigaCloud Technology have risen more than 33% over the past six months, outperforming its industry and fellow industry player N-able. Bitfarms has performed even better.

6-Month Price Comparison

Some Challenges That Cannot Be Overlooked

Ongoing trade tensions pose a notable risk for GCT. Due to the nature of its operations, GigaCloud Technology remains highly exposed to U.S.-China trade frictions and the possibility of higher tariffs.

Persistently elevated inflation and interest rates continue to weigh on consumer discretionary spending, particularly for large-ticket items such as furniture and appliances, which make up a core part of GigaCloud Technology’s business. Since most of the company’s revenues are generated in the United States, it is particularly vulnerable to domestic market pressures. Additionally, high logistics costs could place further pressure on profit margins.

Not an Opportune Time to Buy GCT Stock

There is no doubt that GCT stock is attractively valued. The company’s strong, debt-free balance sheet, apart from the AI-driven logistics expansion capabilities, adds to its appeal. However, the tariff-induced economic uncertainty clouds its near-term outlook. High logistics costs also do not help matters. 

Given the current uncertainty, it is not at all advisable to buy this Zacks Rank #3 (Hold) stock. Investors should monitor the company’s developments closely for an appropriate entry point. However, for those who already own the stock, it will be prudent to stay invested.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

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

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