Shopify is one of the most watched stocks on Wall Street, and if you were lucky enough to think of buying it when it first went public, your investment would be worth almost 3,000% more right now.

There still may be much more to come. But Shopify has a market capitalization of over $100 billion, and there are younger companies that might have more growth opportunities today. If you missed out on Shopify's early gains, consider buying Global-e Online (NASDAQ: GLBE) stock instead. Here's why.

Global-e is just getting started

Global-e operates a platform offering global cross-border solutions for e-commerce retailers. It's a business-to-business company, so most of the time you won't see Global-e's name when you're using its services. But if you order products from another country and see checkouts with different currencies and instant customs information and shipping options, you may be working with Global-e.

Global-e has a long list of high-profile customers and it constantly adds new deals. It has a long-running relationship with global fashion conglomerate LVMH, and it consistently expands this partnership with fashion houses in new markets. In the 2023 fourth quarter, it added new customers like Jean-Paul Gaultier, Glossier, and EleVen by Venus Williams.

It continues to report high growth, though it has been decelerating in the inflationary environment. In 2023, revenue increased 39% year over year to $570 million, and gross merchandise volume (GMV) rose 45% to $3.6 billion.

Global-e isn't profitable by generally accepted accounting principles (GAAP) standards, but profitability is improving. Non-GAAP gross profit increased 46% year over year to $244.8 million in 2023, and Non-GAAP gross margin was up by 1.9 percentage points to 42.9%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 90% to $92.7 million. Net loss narrowed from $195 million to $134 million.

It was a solid report, but management is guiding for a slowdown. It's expecting revenue of about $142 million in the 2024 first quarter and $750 million for the full year, representing growth of 20% and 31%, respectively. Yet, that's still impressive considering the economic climate.

The Shopify partnership

Global-e has a foundational relationship with Shopify, and investing in Global-e gives investors some exposure to Shopify stock. Shopify was an original investor in Global-e's business and offers its platform to its millions of customer accounts in different ways.

The recent launch of Shopify Markets Pro is actually a white-label service of Global-e's product, and so far management says it's going well, with customers continuing to adopt the platform on their websites.

Shopify is home to millions of small and increasingly large businesses and accounts for a significant amount of worldwide e-commerce. That's a huge opportunity for Global-e to grow its business.

Shopify's investment plays a role in Global-e's current net losses. Shopify has stock warrants that Global-e amortized on its income statement as an expense, and that's going to continue until they're fully amortized at the end of next year. That means Global-e isn't likely to become net profitable before that time, if then, creating some risk for investors.

Buy Global-e stock on the dip

Investors weren't thrilled with Global-e's fourth-quarter report, possibly because of the guidance. Global-e stock dropped after the report was issued, and is down 9% this year, but it's up 35% over the past year.

That may have been a necessary correction because its valuation was rising, exceeding a price-to-sales ratio of 14 last year. It now trades at a ratio of 10, which is still rich. It could be justified, though, considering Global-e's performance and potential. This could be an opportunity to buy shares on the dip for the risk-tolerant investor.

Should you invest $1,000 in Global-e Online right now?

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Jennifer Saibil has positions in Global-e Online. The Motley Fool has positions in and recommends Global-e Online and Shopify. The Motley Fool has a disclosure policy.

Missed Out on Shopify Stock? Buy Global-e Stock Instead was originally published by The Motley Fool