Q1 Preview: Amid Q/Q Slowdown, eBay (EBAY) Still Expected to Show Strong Growth

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Shares of eBay Inc. (Nasdaq: EBAY) are higher Wednesday afternoon heading into its first-quarter 2012 earnings announcement, expected out after the market closes.

The Street is looking for 10.6 percent earnings growth to 52 cents per share with revenue of $3.15 billion.

Shares of eBay moved 21.7 percent higher in the quarter to $36.90 at the end of March. Shares are slightly lower since, though eBay's stock ended 2011 up 9 percent. eBay shares have moved from $26.86 to $38.18 over the last year.

Investors will clearly be focusing on the progress of further adoption by PayPal, with additional commentary on European operations and Marketplaces performance expected.

Currently, Bloomberg data shows 21 analysts at Buy on eBay, 13 at Hold, and none with a Sell rating. The Street's price target average is $40, which ranges from $28 to $48.

Analyst Comments

  • Goldman Sachs is looking for better-than-consensus results, with EPS of 51 cents and revs of $3.16 billion. Goldman sees Marketplaces revenue growing 10 percent while same-store sales rose 19 percent.

    PayPal revs should grow at least 28 percent, with first-quarter page views increasing 38 percent (the metric slowed from 42 percent last quarter).

  • BGC Partners sees EPS of 54 cents and revs of $3.16 billion. BGC sees Marketplace gross merchandise volume ex-auto of 17.9 billion, up 9.7 percent. Revs for the segment should rise 7.8 percent to $1.674 billion.

    PayPal revs could grow 24.2 percent to $1.232 billion. BGC commented, "We expect 51% of revenue is international. We expect PayPal to continue its momentum from 2011 into 2012, with over 100M active users and exceeding $1B in revenue for the third time in the March quarter." The firm is positive on the leadership change, though cautious on PayPal gaining further traction at retail locations.

  • JPMorgan is looking for EPS of 47 cents. The firm is modeling Marketplace GMV growth of 8.8 percent, bolstered by improving foreign exchange trends.

    JPMorgan said, "We expect management to discuss the successful trial of the PayPal POS solution with Home Depot in 1Q. eBay has another 20 offline merchants it is rolling out the system to and we would like greater clarity into whether these could become meaningful drivers of revenue in 2012 or 2013."
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out eBay's past performance at Streetinsider's eBay's Income Statement .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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Referenced Stocks: EBAY

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