Impressive Gains Followed by a Significant Drop
eBay Inc. (EBAY), headquartered in California, provides marketplace platforms for buying and selling a diverse range of products. With a market capitalization of $28.9 billion, eBay operates across the Americas, Europe, Asia, and around the world.
Outshining the Market Until Recent Earnings Report
Over the past year, shares of eBay have significantly outperformed the broader market. In the last 52 weeks, EBAY surged by 53.5%, far exceeding the S&P 500 Index’s ($SPX) return of 32.7%. The year 2024 has seen eBay gain 41%, again outperforming the S&P’s 21.2% year-to-date increase.
Digging a bit deeper, eBay’s performance also surpassed that of the ProShares Online Retail ETF (ONLN), which yielded returns of 43.1% over the past year and 24.7% year-to-date.
Aftershocks from Q3 Earnings Report
However, on Oct. 31, eBay shares plummeted by 20.8% after the company reported its third-quarter earnings on Oct. 30. The revenue guidance fell short of analysts’ expectations, and the EBITDA results were disappointing as well.
Analysts Expect Growth Amid Mixed Earnings Surprises
For the current fiscal year, ending in December, analysts project eBay will report an EPS growth of 22.6% year-over-year, reaching $3.85. Recent earnings surprises have been mixed; eBay beat or matched the consensus estimate in two of the last four quarters while missing expectations in the other two.
Among the 28 analysts tracking EBAY, the consensus rating is currently a “Moderate Buy.” This rating is based on nine “Strong Buy” recommendations, one “Moderate Buy,” 17 “Holds,” and one “Strong Sell.”
A Shift in Analyst Sentiment
This current rating reflects a slight decline in bullish sentiment compared to a month ago when eight analysts had recommended a “Strong Buy.”
Recent Upgrade from Bernstein SocGen Group
On Nov. 5, Bernstein SocGen Group upgraded eBay from “Market-Perform” to “Outperform,” maintaining a price target of $70. This upgrade follows a decline in stock price, which analysts view as a favorable entry point. They expect eBay’s focus on product improvements and GMV growth to yield modest advances that could exceed market expectations.
Despite previous market share setbacks, the company’s strategic initiatives—including targeted growth areas and stock buybacks—position it for potential gains, supporting the upgraded rating.
Target Price and Potential Upside
eBay’s average price target stands at $62.03, offering a slight premium compared to current price levels. The highest target from analysts at $72 suggests a potential upside of 17.1%.
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On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
