eBay Prepares to Unveil Q4 Earnings Amid Mixed Analyst Expectations
With a market cap of $30.6 billion, eBay Inc. (EBAY) operates as a prominent global online marketplace, allowing buyers and sellers to connect through its website, eBay.com, mobile apps, and off-platform services. Headquartered in San Jose, California, eBay facilitates a wide array of listings and transactions, securing its status as a key player in the e-commerce space. The company is set to release its fiscal Q4 earnings results on Tuesday, February 25.
Analysts Forecast Significant Earnings Growth
As eBay approaches this announcement, analysts anticipate a profit of $0.96 per share, marking a 21.5% increase from $0.79 per share in the same quarter last year. Historically, eBay has either met or exceeded Wall Street’s earnings expectations in two out of the last four quarters. However, the company missed projections by 5.3% in Q3.
Strong Outlook for Fiscal 2024
Looking ahead to fiscal 2024, forecasts predict that EBAY will achieve an EPS of $3.87, an increase of 23.3% from $3.14 in fiscal 2023.
eBay’s Stock Performance Outshines Market Trends
Shares of eBay have risen 54.1% over the past year, significantly exceeding the S&P 500 Index’s ($SPX) 25.3% increase and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 32.3% rise.
Market Reaction Following Q3 Results
Despite reporting adjusted earnings of $1.19 per share and revenues of $2.6 billion on October 30, eBay’s stock dropped 8.2% the following day due to a lackluster outlook for the crucial holiday shopping season. The company projected Q4 revenue between $2.5 billion and $2.6 billion, which fell short of analyst expectations. Additionally, a modest year-over-year increase of 1% in active buyers— totaling 133 million—raised concerns about growth sustainability. While eBay achieved strong advertising performance and GMV growth, the missed guidance overshadowed these positive developments.
A Boost from New Partnerships
On January 8, eBay’s stock surged to a three-year high after it was reported that Meta Platforms (Facebook) is testing eBay ads on its Facebook Marketplace, a move potentially driven by regulatory pressures in Europe. This partnership could help eBay reach Facebook’s extensive user base, which may invigorate the company’s growth in active buyers and merchandise volume.
Analysts Maintain Cautious Optimism
The overall consensus on eBay’s stock remains cautiously optimistic, with a “Moderate Buy” rating. Out of 29 analysts following the stock, nine suggest “Strong Buy,” one indicates “Moderate Buy,” 17 recommend “Hold,” one proposes “Moderate Sell,” and one advises “Strong Sell.” Currently, eBay is trading above the average analyst price target of $64.52.
On the date of publication, Sohini Mondal 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. More news from Barchart
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