eBay (EBAY) Gears Up for Q1 Earnings: What'S in the Cards?

eBay EBAY is set to report first-quarter 2021 results on Apr 28. In the last reported quarter, it delivered an earnings surprise of 3.6%.

The company beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, with an average of 5.6%.

For the first quarter, the Zacks Consensus Estimate for earnings has remained stable at $1.07 per share over the past 30 days. This indicates growth of 39% from the year-ago reported figure.

The consensus mark for revenues is pegged at $2.97 billion, implying growth of 25.1% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

eBay Inc. Price and EPS Surprise

eBay Inc. Price and EPS Surprise

eBay Inc. price-eps-surprise | eBay Inc. Quote

Factors to Note

eBay’s solid performance of the Marketplace platform across all major end markets served is expected to have driven the top line in the to-be-reported quarter.

As revealed during fourth-quarter 2020 earnings release, growing adoption of the company’s managed payments remained a major positive in the last reported quarter. The trend is expected to have continued in the quarter to be reported, as the migration of sellers to managed payments increased.

This also bodes well for the company’s growing initiatives toward strengthening the managed payments offerings portfolio and is expected to have helped it in attaining GMV growth. Also, this is in sync with eBay’s deepening focus on scaling managed payments globally.

Markedly, eBay’s Promoted Listings delivered robust performance in the last reported quarter. This trend is expected to have continued in the to-be-reported quarter, driven by growing momentum across sellers on the back of data-driven recommendations, which in turn are aiding ad conversions.

Its verticals namely Home & Garden, Electronics, Fashion, Auto Parts and Collectibles have been seeing strong demand. The increased demand is being driven by a number of factors like organic traffic, enhanced marketing and higher conversions on its platform.

In addition, eBay’s sales are expected to have improved in the quarter to be reported owing to growth in online consumer spending due to broad-based and increasing social distancing.

Its accelerated Artificial Intelligence efforts through personalization, image search technology and customer support are expected to have enhanced the Marketplace platform.

The company has been providing more data — including price and restocking guidance — to marketplace sellers, as well as greater insight into inventory such as demand signals for the right products, price, and timing.

These factors are expected to have aided the top line in the to-be-reported quarter.

Core Platform Strength to Drive Net Transaction Revenues

In a bid to increase total net transaction revenues, eBay has been strengthening the core platform and improving user experience.

The company has been accelerating efforts to build product catalogs on structured data, enhance mobile platform, roll out browse-inspired shopping journeys, rejuvenate customer-to-customer business and strengthen its brand. These are likely to have contributed to top-line growth in the first quarter.

Quarterly Expectations

For first-quarter 2021, eBay expects net revenues within $2.94-$2.99 billion.

Non-GAAP earnings are anticipated in the range of $1.03-$1.08 per share.

Earnings Whispers

Our proven model predicts an earnings beat for eBay this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of +2.98%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, eBay has a Zacks Rank #2.

Other Stocks That Warrant a Look

Here are a few other stocks that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the quarter to be reported.

Verizon Communications Inc. VZ has an Earnings ESP of +0.41% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Waters Corporation WAT has an Earnings ESP of +2.94% and a Zacks Rank #2.

Danaher Corporation DHR has an Earnings ESP of +4.11% and a Zacks Rank #3.

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

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