Q4 Preview: eBay (EBAY) - Make a Bid, Or Buy It Now?

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eBay (Nasdaq: EBAY) is trading - ahead of the company's fourth quarter earnings release, expected out after the market closes today. Shares are -.

EBAY is expected to report EPS of $0.47 on revs of $2.49 billion. Last quarter, the San Jose, CA-based auction site posted an EPS of $0.40 with revs of $2.249 billion, topping the consensus estimates looking for EPS of $0.37 and revs of $2.18 billion. In Q409, the company produced EPS of $0.44 on revs of $2.37 billion, both topping views.

Shares gained 17.3% through the quarter, to $28.68 at the end of December. The stock is up 2.8% since then, and finished 2010 20% higher.

A simple valuation puts eBay with a forward P/E of 15.9x FY11 EPS estimates. This compares to 54.2x for Amazon.com (Nasdaq: AMZN), 18.8x for Google, Inc. (Nasdaq: GOOG) and 20.8x for Yahoo! (Nasdaq: YHOO).

Data from Bloomberg has 15 analysts with a Buy on EBAY, 19 with a hold, and one suggesting to Sell. The analyst price target average is $31, with a high of $37 and low of $20.

Summary
Janney Capital expects eBay to meet-or-exceed their expectations calling for an EPS of $0.47 and revs of $2.46 billion. Checks point to eBay's gross merchandise volume (GMV) coming in above their 2% estimate. Sales were stronger in Fashion, and weaker in Consumer Electronics and Video Games. PayPal should see growth in the 20% arena.

Janney thinks that FY11 guidance will be conservative, based on continuing turnaround efforts for their Marketplace segment. They continue to believe: 1) 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.

Janney currently has a Buy rating an fair value of $32 on the shares.

BGC Partners is looking for an EPS of $0.48 and revs of $2.49 billion. They expect GMV of $14.983 billion, ex-auto, with fixed price format accounting for 60% of transactions. MarketPlace revs are expected to be $1.519 billion. e-Commerce transactions should grow from $600 million in 2009, to around $2 billion in 2010, with 13 million of their mobile apps downloaded to-date.

BGC has a Buy with $35 price target on the shares.

Also notable, ChannelAdvisor data shows that same-store sales turned negative in December (down 1.7%) from an 8% increase in November. SSS will have grown 3.8% through Q410.

eBay is expected to release their Q410 earnings on Wednesday, January 19, 2011, at approximately 7:00am EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.



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.



This article appears in: Investing , Stocks

Referenced Stocks: AMZN , EBAY , GOOG , YHOO

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