) competes with other e-commerce sites like Amazon (
), Wal-Mart (
), Overstock (
), and Blue Nile (
) through through its online marketplace, ebay.com, where buyers
and sellers can transact in a variety of products including
clothing, electronics, media, collectibles, automobiles and many
other types of merchandise.
eBay also makes money through its global payments platform
PayPal, which enables secure, easy, and cost-effective transfer of
payments online. eBay's PayPal service competes with Google
(GOOG) Checkout and credit card companies like
(AXP), Visa (V) and MasterCard (MA).
We currently maintain a
price estimate of $32.81 for Ebay's stock
, slightly above the market price of $31.50.
Stupendous Growth in Number of PayPal Accounts
The number of PayPal accounts has risen from 23.6 million in
2005 to 94.4 million in 2010, representing a growth rate of around
30% annually. The growth is a reflection of eBay's concerted
efforts to integrate PayPal into its "Marketplaces" segment and
forge strategic relationships with a diversified group of leading
online commerce portals like Blue Nile. We anticipate that PayPal
will continue to see double digit growth in the number of accounts
on its platform.
In line with its customer account growth, PayPal is witnessing
corresponding growth in its total payment volumes (TPV). eBay
actually contributes a hefty proportion of PayPal's TPV (40% as of
2009), and this is likely to increase as eBay further integrates
PayPal into its adjacent marketplace platforms like Shopping.com
and Rent.com. In addition, eBay's focus on buyer protection
programs will expand customer adoption of the service.
PayPal's penetration into third-party platforms is also
increasing. PayPal has already forged relationships with leading
e-commerce websites like Blue Nile, Southwest Airlines, Barnes
& Noble, and Toys R US.
Given the rising growth in the number of PayPal accounts, we
pose the following question….
What Percent of Ebay's Stock Value Comes from
Click a response above to see the answer
See our full analysis and $32.81 price estimate