Are Analysts and Investors Getting Too Down on eBay?
As a result analysts piled on to the stock, but they may have been overly negative, considering the earnings report.
eBay Inc. (NASDAQ: EBAY) recently posted its fourth-quarter financial results, which were in line with estimates, but guidance severely undercut this success. As a result analysts piled on to the stock, but they may have been overly negative, considering the earnings report.
The e-commerce giant posted adjusted diluted earnings per share (EPS) of $0.50 on revenues of $2.3 billion. In the same period a year ago, eBay reported $0.55 EPS on revenues of $4.92 billion. The Thomson Reuters estimates called for EPS of $0.50 and $2.32 billion in revenue.
Gross merchandise value rose 5% in the quarter to $21.9 billion, excluding currency exchange effects.
The company also generated $1.1 billion of operating cash flow from continuing operations and $1.0 billion of free cash flow from continuing operations, and it repurchased $550 million of its common stock and completed the divestiture of its Enterprise business on November 2, 2015.
The company’s first-quarter outlook calls for revenues of $2.05 billion to $2.1 billion and adjusted EPS of $0.43 to $0.45. The EPS outlook is considerably short of the consensus estimate of $0.48 billion. The consensus revenue forecast calls for $2.16 billion, well ahead of the top of eBay’s expected range.
Analysts had this to say about eBay:
- R.W. Baird has an Outperform rating but lowered its price target to $30 from $33.
- Benchmark has a Buy rating and only slightly lowered its price target to $28 from $29.
- Bernstein lowered its price target to $32 from $34.
- Canaccord Genuity has a Hold rating and lowered its price target to $26 from $28.
- Cowen has a Market Perform rating and lowered its price target to $25 from $27.
- Credit Suisse lowered its price target to $29 from $30.
- Deutsche Bank has a Hold rating and lowered its price target to $28 from $33.
- Evercore ISI has a Hold rating and lowered its price target to $26 from $29.
- Goldman Sachs has a Buy rating and lowered its price target slightly to $32 from $33.
- Jefferies has a Hold rating and lowered its price target to $25 from $28.
- JPMorgan lowered its price target to $28 from $30.
- Macquarie has a Neutral rating and lowered its price target to $26 from $29.
- RBC Capital Markets has a Sector Perform rating and lowered its price target to $29 from $30.
- SunTrust Robinson Humphreys has a Neutral rating and lowered its price target to $26 from $28.
- Susquehanna has a Positive rating and lowered its price target to $32 from $34.
- UBS has a Buy rating and lowered its price target to $32 from $34.
Shares of eBay ended the week at $23.46, with a consensus analyst price target listed as $28.56 (but this may change) and a 52-week trading range of $22.11 to $29.83.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
