The Zacks Analyst Blog Highlights: eBay, Home Depot,, Google and Mastercard - Press Releases


Shutterstock photo

For Immediate Release

Chicago, IL - February 10, 2012 - announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include eBay Inc. ( EBAY ), Home Depot ( HD ), ( AMZN ), Google Inc. ( GOOG ) and Mastercard Inc. ( MA ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Thursday's Analyst Blog:

Earnings Scorecard: eBay

Following the fourth quarter earnings announcement on January 18, more than half the analysts covering eBay Inc. ( EBAY ) have made downward revisions to their estimates. Decelerating gross merchandise volume (GMV) trend, inconsistent performance by the Marketplaces segment, European macro concerns, and intensifying competition could be the reasons for downward revisions.

Last Quarter Synopsis

eBay's fourth quarter earnings excluding stock based compensation came in at 60 cents, better than the Zacks Consensus of 55 cents, aided by holiday-driven demand and strong top-line growth, partially offset by a higher tax rate.

Revenue in the quarter increased sequentially as well as year over year to 3.38 billion, exceeding the guidance range of $3.20-$3.35 billion. Both transactions-based revenue (up 14.2% sequentially) and marketing services revenue (up 12.3% sequentially) contributed to the revenue upside.

Gross margins increased 31 bps sequentially to 70.0% due to higher volumes, a favorable product mix and the positive impact of recent acquisitions.

Agreement of Analysts

Of the 15 analysts covering the stock, 8 made downward revisions for the upcoming quarter, with only 1 analyst moving upward in the last 30 days. Also, for fiscal 2012, 12 out of 18 analysts lowered their estimates, while 3 analysts increased theirs over the same 30-day time period. This indicates the negative sentiment of the analysts post fourth-quarter earnings.

Analysts, by and large, believe that eBay's core business in the US has been underperforming domestic e-commerce growth for some time now, which can now be seen in the key international markets as well, indicating market share losses.

They remain concerned about the relative weakness in merchant services total payment value (TPV) growth due to the continued negative impact from foreign currency and lack of recovery in the rate of cross border commerce, particularly in Europe.

According to the analysts, eBay's continued investment in new technologies and acquisitions will likely lower margins in the coming quarters. Additionally, they believe that a combination of decelerating GMV growth and tough comps will likely limit operating profit growth in 2012.

However, a handful of analysts expect EBAY to deliver solid top-line growth, driven by strength in PayPal, and expectations of continued improvement in Marketplaces. They contend that the fundamentals of PayPal's business will remain strong in 2012.

For the first quarter of fiscal 2012, eBay expects revenue in the range of $3.05-$3.15 billion, down 8.3% sequentially. Additionally, management expects total mobile payment volume to increase to $7 billion in 2012, aided by the Paypal Mobile Express Checkout system and Zong acquisition.

The consensus, as evident from the analyst agreement, points to weaker performance going forward.

Impact on Estimates

Over the 30 day period, the Zacks Consensus Estimate has fallen 3 cents for both the upcoming quarter and fiscal 2012 to 43 cents and $1.96, respectively. In the past 90 days, the Zacks Consensus Estimate fell 3 cents for the upcoming quarter but remained unchanged for fiscal 2012.


We believe that eBay is well positioned to not only expand its PayPal segment, but also grow its Marketplace business, both acting as positive catalysts for shares. We expect eBay's Marketplace business to continue showing all signs of a turnaround, with Payments continuing to gain market share, both online and offline.

We remain impressed with eBay's strategy and execution and believe that PayPal is well positioned for sustained growth. Starting from the fourth quarter, Paypal announced its initial Point of Sale (POS) test with Home Depot ( HD ), which was increased to 51 Home Depot stores. While this would widen PayPal's addressable market, the success of these POS tests is still to be seen.

PayPal's mixed funding sources between bank transfers, debit cards and credit cards, offers cheaper payment transactions than credit cards. We believe that this competitive advantage should drive penetration across the Internet and broadening mobile landscape.

However, we are concerned about increasing competition from major online retailers, such as ( AMZN ), as well as many other smaller players. Additionally, Google Inc. ( GOOG ) has been eyeing the online payments space, threatening eBay's dominance. Google Wallet has the potential to become a predominant choice for users' mobile payments given the relationship it has already forged with credit card giants such as Mastercard Inc. ( MA ) and other banks.

Currently, eBay has a Zacks #3 Rank, implying a short-term Hold recommendation.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at .

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

AMAZON.COM INC ( AMZN ): Free Stock Analysis Report
EBAY INC ( EBAY ): Free Stock Analysis Report
GOOGLE INC-CL A ( GOOG ): Free Stock Analysis Report
HOME DEPOT ( HD ): Free Stock Analysis Report
MASTERCARD INC ( MA ): Free Stock Analysis Report
To read this article on click here.

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

This article appears in: Investing , Stocks
Referenced Symbols: AMZN , EBAY , GOOG , HD , MA

More from


Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by