eBay (EBAY) earnings preview: can the company catch up with Amazon?

6:13 pm ET, 15 Jul 2018

eBay Inc. (EBAY) is expected to report earnings on July 18 after market close.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 36.98, down -0.16%.

What are EBAY earnings expectations?  What news will the market be watching out for?  

EBay's first-quarter update offered some good and some bad news. On one hand, platform enhancements appear to be resonating with sellers.  Both Gross Merchandise Value (GMV) and revenue were up 7%. However, with a deceleration in active buyers (up 4% to 171 million, versus 5% growth during 2017), questions about eBay's ability to sustain its growth linger.

EBay's site enhancements is a clear positive, and brand marketing initiatives paired with future marketplace plans such as voice/image search, VR/AR functionality, and simplified returns should make the platform more attractive for sellers.  From our perspective, GMV growth in the mid- to high single digits is a realistic assumption for eBay the next five years--especially with Amazon aggressively pursuing small and midsize business sellers and many large retailers reaping benefits from new omnichannel and fulfillment strategies.

eBay has also announced plans to partner with Netherlands-based Adyen to simplify the end-to-end payment process on its Marketplace platform with primary goals of lower costs for sellers (charging a single fee for marketplace and payment services) while offering buyers a streamlined process across a wider range of payment options.  This and other marketplace enhancements could make eBay more attractive for vendors looking to diversify beyond Amazon.  

eBay Inc., has a history of meeting analysts’ earnings estimates.  In the past four quarters, the company: 

  • Delivered on the analyst EPS estimate ($.45 actuals vs. $.45 forecast) in FQ2’17;
  • Delivered on the analyst EPS estimate ($.48 actuals vs. $.48 forecast) in FQ3’17;
  • Delivered on the analyst EPS estimate ($.59 actuals vs. $.59 forecast) in FQ4’17;
  • Delivered on the analyst EPS estimate ($.53 actuals vs. $.53 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 16% year-over-year to $.52, while revenue is expected to grow 15% year-over-year to $2.67 billion.  

Over the last month, eBay Inc. (EBAY) returned -8.67%.

eBay Inc. (EBAY) forward P/E ratio is 13.73, and it’s low compared to its industry peers’ P/E ratios.

eBay Inc. (EBAY) average analyst price target ($48.34) is 30.72% above its current price ($36.98).

For the latest price and information on eBay Inc., please visit Finstead and search for "EBAY price" or "EBAY news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

eBay Inc. (EBAY) Stock Guide

Updated at: 6:18 am ET, 12 Aug 2020

Before we start: if you're looking for EBAY stock price, you can quickly find it out by visiting Finny and typing "EBAY quote". If you're looking for a quick scoop on EBAY stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "EBAY". You'll get all this info in one place. Or you can just type "EBAY news" to get the latest stock news.

Looking to buy or sell eBay Inc. (EBAY)? Interested in getting the full scoop on EBAY, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this EBAY stock guide, we'll address key questions about EBAY, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are EBAY earnings?
2. When is EBAY earnings date?
3. What is EBAY dividend?
4. What is EBAY dividend yield?
5. What is EBAY stock forecast (i.e., prediction)?
6. EBAY buy or sell? What is EBAY Finny Score?
7. What are the reasons to buy EBAY? Why should I buy EBAY stock?
8. What are the reasons to sell EBAY? Why should I sell EBAY stock?
9. What are EBAY key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are EBAY earnings?

EBAY trailing 12-month earnings per share (EPS) is $6.46.

2. When is EBAY earnings date?

EBAY earnings date is October 21, 2020.

3. What is EBAY dividend?

EBAY forward dividend is $0.64.

4. What is EBAY dividend yield?

EBAY forward dividend yield is 1.16%.

Analyst Predictions

5. What is EBAY stock forecast (i.e., prediction)?

Based on EBAY analyst price targets, EBAY stock forecast is $60.12 (for a year from now). That means the average analyst price target for EBAY stock is $60.12. The prediction is based on 38 analyst estimates.

The low price target for EBAY is $35.00, while the high price target is $82.00.

EBAY analyst rating is Buy.

Analysis

6. EBAY buy or sell? What is EBAY Finny Score?

#{finnyScore:83}Our quantitative analysis shows 10 reasons to buy and 2 reasons to sell EBAY, resulting in Finny Score of 83.

7. What are the reasons to buy EBAY? Why should I buy EBAY stock?

Here are the reasons to buy EBAY stock:

  • With more than half of the world's Internet users coming from developing markets, eBay has sizable cross-border transaction growth opportunities.
  • Capital-allocation strategies--including $1.0 billion in share repurchases authorizations and the capacity for a regular dividend--make eBay an intriguing income play.
  • While it represents a relatively small part of the overall business, we view StubHub as an attractive asset. We believe this segment is on pace to deliver almost 10% average annual GMV growth the next five years.
  • eBay is very well positioned to take advantage of the changing ways in which consumers shop. The company offers an online marketplace where any given day, there are millions of items across thousands of categories for sale. The retailers are now being wooed by the online platform with all kinds of tools to build an effective online business.
  • eBay’s is progressing well with replatforming and brand enhancement initiatives. The company continues to strengthen its core platform and improve user experience. The company is leveraging on its structured data and Artificial Intelligence (AI) strength to build product catalogs, enhance mobile platform, roll out new browse inspired shopping journeys, enhance customer-to-customer (C2C) business and strengthen its brand.
  • eBay’s push into mobile paves the way for continued growth in the future. Mobile commerce volumes have been growing rapidly in recent quarters helped by a number of mobile apps already available and several others (for specific shopping verticals) along the way. Despite the very strong growth in mobile users, their relatively low contribution to volumes is because of the fact that they are mainly a younger demographic, often located in various emerging markets.
  • eBay has spun off PayPal, the payments business that has contributed most of its growth in recent times. This is helping the two businesses focus on their respective opportunities. eBay will also benefit, because although its growth rate has come down, the company will be able to reinvest the money it was putting into PayPal to further its own growth plans.
  • The company has introduced several measures to fuel growth in its Marketplaces business. It offers a local feature, which allows a customer to buy something online and then pick it up at a local store when convenient. Amazon is already doing this and aside from increased customer satisfaction (because of the added choice), it lowers shipping costs.
  • eBay has been active on the acquisition front. Last year, the company acquired Expertmaker and SalesPredict, respectively to strengthen its artificial intelligence, machine learning and structured data efforts. eBay also acquired Corrigon Ltd., which contributes significantly to its Marketplace platform's structured data initiative.
  • eBay continues to revamp seller policies to help small- and medium-sized sellers and better reward those who provide great service to buyers. The company is also allowing sellers to tailor the way they manage returns based on their specific business needs with as much involvement from eBay as they desire. In August 2016, it launched Seller Hub, which consolidates sellers’ listing and marketing tools and deep data insights and selling recommendations into one place.
  • Two of eBay’s adjacent platforms — Classifieds and StubHub — greatly complement eBay’s core. Its Classifieds portfolio provides a very important way to capture the local Customer-to-customer opportunity, which often represents customers who are selling items more suited to a local transaction. So far, Classifieds has seen handsome growth in the U.S., the U.K. and Germany.
  • The choice of formats offered by eBay distinguishes it from other online marketplaces and helps it stem sales losses. This means that a person looking to buy an item on the eBay marketplaces not only has the choice of a number of brands, but also the option of purchasing them second-hand, through auction. This is a unique feature that distinguishes the company.
  • As a strategy to defend its market share against growing competition, eBay keeps doors open for technology partnership with offline peers. We are optimistic about this move and believe that this can become one of the important growth drivers for eBay in the near future. E-commerce growth, increased smartphone usage and “24/7” shopping opportunity are believed to be the major growth drivers for eBay in the long term.
  • eBay has a strong balance sheet. The company had around $5.9 billion in cash and short term investments at the end of 2017. eBay consistently converts a portion of the cash on hand to investments. Notably, cash and short-term investments at the end of 2017 were around 23% of total assets.
  • EBAY quarterly revenue growth was 18.20%, higher than the industry and sector average revenue growth (0.81% and 0.78%, respectively). See EBAY revenue growth chart.
  • EBAY forward dividend yield is 1.16%, higher than the industry (0.24%) and sector (0.55%) forward dividend yields. See EBAY forward dividend chart.
  • EBAY forward P/E ratio is 13.71, which is low compared to its industry peers’ P/E ratios. See EBAY forward P/E ratio chart.
  • EBAY Price/Sales ratio is 3.39, which is low compared to its industry peers’ P/S ratios. See EBAY forward Price/Sales ratio chart.
  • EBAY PEG ratio (P/E adjusted for growth) is 0.95, which is low compared to its industry peers’ PEG ratios. See EBAY PEG chart.
  • EBAY average analyst rating is Buy. See EBAY analyst rating chart.
  • EBAY average analyst price target ($60.12) is above its current price ($54.29). See EBAY price target chart.
  • EBAY cash to debt ratio is 0.58, higher than the average industry (0.16) and sector (0.13) cash to debt ratio. See EBAY cash to debt chart.
  • EBAY Enterprise Value/Revenue multiple is 3.73, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See EBAY Enterprise Value/Revenue chart.
  • EBAY Enterprise Value/EBITDA multiple is 12.55, which is low compared to its industry peers’ Enterprise Value/EBITDA ratios. See EBAY Enterprise Value/EBITDA chart.

8. What are the reasons to sell EBAY? Why should I sell EBAY stock?

Let's look at the reasons to sell EBAY stock (i.e., the bear case):

  • To some extent, eBay is still adjusting to the May 2014 data breach/password reset issues and Google's search engine algorithm changes, which has increased user acquisition costs and impacted its network effect.
  • Although eBay's unique product selection is a competitive advantage, we have concerns that small- and medium-sized sellers may gravitate toward platforms with enhanced fulfillment offerings like Amazon.
  • EBay faces rivalry from Amazon, Google, Alibaba, and other rivals offering emergent marketplaces and other online consumer services.
  • There remains a concern about eBay’s increased investment in overall platform technology and slower growth rate compared to its peers. Furthermore, eBay’s growth continues to suffer due to a weak world economy. The company is heavily dependent on countries outside the U.S for its transaction and Internet sales.
  • EBAY profitability is declining. The YoY profit margin change was -91.54 percentage points. See EBAY profitability chart.
  • EBAY Price/Book ratio is 13.19, which is high compared to its industry peers’ P/B ratios. See EBAY forward Price/Book ratio chart.

Key Stats

9. What are EBAY key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for EBAY:

Metrics EBAY
Price $56.27
Average Price Target / Upside $60.12 / 6.84%
Average Analyst Rating Hold
Forward Dividend Yield 1.15%
Industry Specialty Retail
Sector Consumer Cyclical
Number of Employees 14,000
Market Cap $39.4B
Forward P/E Ratio 14.21
Price/Book Ratio 3.52
Revenue (TTM) $11.2B
YoY Quarterly Revenue Growth 18.20%
Profit Margin 44.84%

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Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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