NASDAQ:GCT is not too expensive for the growth it is showing.

Last update: Jan 24, 2024

Consider GIGACLOUD TECHNOLOGY INC - A (NASDAQ:GCT) as an affordable growth stock, identified by our stock screening tool. NASDAQ:GCT is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

A Closer Look at Growth for NASDAQ:GCT

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:GCT was assigned a score of 9 for growth:

The Earnings Per Share has grown by an impressive 7560.20% over the past year.
The Earnings Per Share has been growing by 72.61% on average over the past years. This is a very strong growth
Looking at the last year, GCT shows a very strong growth in Revenue. The Revenue has grown by 24.77%.
GCT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 58.84% yearly.
GCT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 157.32% yearly.
GCT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.78% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Exploring NASDAQ:GCT's Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:GCT scores a 8 out of 10:

GCT's Price/Earnings ratio is a bit cheaper when compared to the industry. GCT is cheaper than 63.64% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.98, GCT is valued a bit cheaper.
A Price/Forward Earnings ratio of 11.10 indicates a reasonable valuation of GCT.
Based on the Price/Forward Earnings ratio, GCT is valued cheaply inside the industry as 90.91% of the companies are valued more expensively.
GCT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.90, which is the current average of the S&P500 Index.
100.00% of the companies in the same industry are more expensive than GCT, based on the Enterprise Value to EBITDA ratio.
GCT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. GCT is cheaper than 72.73% of the companies in the same industry.
GCT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GCT has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as GCT's earnings are expected to grow with 157.32% in the coming years.

Understanding NASDAQ:GCT's Health Score

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:GCT was assigned a score of 7 for health:

GCT has an Altman-Z score of 4.45. This indicates that GCT is financially healthy and has little risk of bankruptcy at the moment.
GCT has a debt to FCF ratio of 0.00. This is a very positive value and a sign of high solvency as it would only need 0.00 years to pay back of all of its debts.
GCT has a better Debt to FCF ratio (0.00) than 90.91% of its industry peers.
GCT has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
GCT has a better Debt to Equity ratio (0.00) than 90.91% of its industry peers.
A Current Ratio of 2.43 indicates that GCT has no problem at all paying its short term obligations.
GCT's Quick ratio of 1.84 is amongst the best of the industry. GCT outperforms 90.91% of its industry peers.

Evaluating Profitability: NASDAQ:GCT

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:GCT scores a 7 out of 10:

The Return On Assets of GCT (11.82%) is better than 90.91% of its industry peers.
GCT has a better Return On Equity (24.63%) than 81.82% of its industry peers.
GCT has a better Return On Invested Capital (17.45%) than 90.91% of its industry peers.
GCT had an Average Return On Invested Capital over the past 3 years of 23.38%. This is significantly above the industry average of 13.78%.
The 3 year average ROIC (23.38%) for GCT is well above the current ROIC(17.45%). The reason for the recent decline needs to be investigated.
GCT has a better Profit Margin (10.71%) than 100.00% of its industry peers.
GCT's Profit Margin has improved in the last couple of years.
GCT's Operating Margin of 15.05% is amongst the best of the industry. GCT outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of GCT has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of GCT for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.