Roth MKM downgrades GigaCloud after ‘disappointing’ Q1 outlook

Roth MKM analyst Matt Koranda downgraded GigaCloud (GCT) to Neutral from Buy with a price target of $15, down from $32. The company’s “soft” Q4 report and “disappointing” Q1 outlook that suggests a deceleration in sales combined with margin erosion, the analyst tells investors in a research note. The firm says that before recommending the shares again, it needs visibility into first-party sales growth, service revenue re-acceleration, and sustainable margin expansion. While GigaCloud shares are “cheap” and the company generates cash, the valuation will remain “discounted” until fundamentals improve, contends Roth.