Traders are buying shares of eBay, Inc. (Nasdaq: EBAY) Wednesday
ahead of the company's first-quarter earnings report, expected out
after the market closes. Shares are up1.5 percent to $33.55.
eBay is expected to report EPS of $0.46 on revs of $2.48 billion.
Last quarter, eBay reported EPS of $0.52 on revs of $2.5 billion,
both beating consensus views. Looking back at the first quarter of
last year, eBay posted EPS of $0.42, excluding items, on revs of
$2.2 billion, compared with consensus EPS of $0.41 and revs of
Shares gained 8.2 percent through the quarter and are up 7.1
eBay stock is going for a forward P/E of 15.0 FY12 EPS estimates,
compared with 42.2x at Amazon.com (Nasdaq: AMZN) and 39.7x for
Netflix, Inc. (Nasdaq: NFLX).
Data from Bloomberg has 11 analysts with a Buy on eBay, 18 with a
Hold, and one suggesting to Sell. The analyst price target average
is $36, with a high of $44 and low of $22. Shares have traded in a
range of $35.35 - $19.06 over the last 52-weeks.
- Wells Fargo is looking for EPS if $0.46 on revs of $2.48
billion. The firm sees Marketplace net revenue growth of 8
percent year-over-year, with a 23.1 percent growth in Payments.
On the call, Wells Fargo is looking for an update on Spring fee
changes, thoughts on competition for PayPal (particularly from
Payfone/American Express, MasterCard/Gemalto, Research in
Motion/MasterCard, Visa, and Google.Verifone), and progress with
local, social, and mobile initiatives.
- Wedbush expects EPS of $0.46 with revs of $2.479 billion. The
firm is looking for PayPal to propel earnings in the quarter,
with sales of $993 million. Specifically, on PayPal: "We expect
~22% YoY growth in Total Payment Volume (TPV) for 1Q11, excluding
contributions from Bill Me Later. We believe international should
remain the primary engine of growth in Q1, increasing TPV 31%
YoY, compared to 20% YoY in the U.S." Wedbush does expect that
eBay will lose e-commerce market share overall, amid continued
momentum with Marketplace. Operating margins should be flat in
- Kaufman seeks EPS of $2.504 billion and EPS of $0.47. Kaufman
is also expecting Payments to lead the way, commenting "1)
Payments segment grows at 20%+ rates, driven mainly by merchant
services and to a smaller extent by international growth, digital
goods and mobile payments; 2) eBay benefits from higher traction
internationally, especially in countries where it does not
compete directly with Amazon; 3) eBay benefits from the secular
growth in eCommerce, due to its role as an "eCommerce enabler" to
merchants and 4) rapid growth in mobile eCommerce." Kaufman also
believes that eBay's market share in the U.S. is shrinking to
Amazon, but that it should still be able to grow by mid- to
high-single digits on an annual basis.
On PayPal, Kaufman notes some advantages: "1) global reach (190
countries); 2) interoperability with multiple financial networks;
3) expertise in online security and fraud management. We believe
competitors such as traditional networks (Visa, Mastercard, Amex)
introducing online payments as well as new payments start-ups,
will find it difficult to overcome these competitive barriers.
While Near Field Communications (
) based payments are in early stages of development, we believe
this trend will benefit PayPal over the long term."
- Janney expects eBay to report slightly above its EPS estimate
of $0.46 with revs of $2.46 billion. "1) we believe eBay's
playbook of driving traffic to its top-rated sellers should
ultimately improve the buying experience; 2) increased selection
and an improved buying experience should begin to stem market
share losses; and 3) expect strong growth at PayPal...We expect
another solid quarter from PayPal given solid overall eCommerce
growth in Q1, expanding Merchant Services adoption and growth on
eBay. Specifically, we expect TPV growth of 19% to $25.4BN driven
by 30% Merchant Services growth and 6% "on eBay" - which appears
somewhat conservative given 25%+ growth in last several quarters
(the comp is 100bps tougher q/q in Q1)."
- BGC Partners is looking for EPS of $0.48 on revs of $2.479
billion. The firm sees gross merchandise volume of 14.04 billion,
excluding automotive. "Marketplace revenue is estimated at 1,515M
and 61% of total, representing 9.3% YoY growth and 0.6%
sequential decline. Payments revenue is estimated at 973M and 39%
of total, representing 20.2% YoY growth and 0.2% sequential
growth. Total payment volume is estimated at 27.403B, growth of
2.0% sequential and 28.4% YoY. We expect 53.6% of revenue is
international." BGC believes that velocity and
average-selling-price will drive gains for eBay's Marketplace
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results withi0 n seconds of the release.