eBay's EBAY share price has increased 44.8% year to date (YTD), outperforming the broader Zacks Retail-Wholesale sector’s appreciation of 28.8%.
However, the company has underperformed the Zacks Internet - Commerce industry, and its peers like Booking Holdings BKNG, Amazon AMZN and Travelzoo TZOO.
In the same time frame, TZOO, BKNG and AMZN shares have returned 105.4%, 47.3%, and 38.6%, respectively. The industry has risen 33.5% YTD.
The company’s outperformance can be attributed to the strengthening momentum across Focus Categories of EBAY and geo-specific investments. Further, first-party advertising revenues contributed to the top-line growth. For the third quarter of 2024, eBay’s first-party advertising products generated revenues of $396 million, up 14% on an FX-neutral basis from the prior-year quarter.
However, the dull performance of active buyers and stiff competition in the Retail Wholesale sector remain headwinds. At the end of the third quarter of 2024, EBAY’s active buyer base, which stood at 133 million at the end of the second quarter, increased 1% year over year.
eBay Inc. Price and Consensus
eBay Inc. price-consensus-chart | eBay Inc. Quote
The company prospects are also suffering due to macroeconomic uncertainty and a dull consumer spending environment.
Will Expanding Portfolio Drive EBAY’s Top Line?
eBay has been leveraging its innovation strategy from a focused category to provide relevant products to customers, particularly in the C2C seller segment, as the inventory is less price sensitive against the B2C seller segment.
eBay recently launched Evo, an in-house brand and design offering, that aims to provide a seamless customer experience along with a modern and simple approach.
eBay’s effort to drive geo-specific top line bodes well for investors. The company introduced enhancements in the pre-owned apparel segment in the U.K., including simplified tools for sellers and improved tools to increase demand via Explore and Shop the Look.
eBay has also introduced capabilities to improve the C2C experience for customers and has provided a simplified native listing flow, improved local pickup processes, managed shipping and has developed discovery capabilities and eBay balance.
EBAY acquired Golbin, expanding its market reach in the collectibles market. The company provides users a platform to auction select items, creating awareness for the platform as well as driving consumer momentum and traffic.
Further, EBAY also partnered with Liberis to expand the Seller Capital program in the United States to provide sellers with Flexible Cash Advance for funds from $5000 to $2 million. The company recently launched a horizontal rollout of a native listing flow for C2C sellers in the U.K. to reduce the decision steps for sellers and provide pricing recommendations by integrating AI-driven descriptions and photo enhancements to drive experience.
EBAY is leveraging GenAI and its internal LLM to develop tools for B2C users and launched a bulk listing tool to create a large number of listings efficiently and quickly.
However, eBay faces intense competition in the e-commerce segment. Further, softness in advertising products is a headwind. Macroeconomic uncertainties and sluggish consumer discretionary spending remain concerns.
EBAY’s Positive Guidance
For the fourth-quarter 2024, eBay expects revenues in the range of $2.53-$2.59 billion. On an FX-neutral basis, revenue growth is anticipated to be (1)-1%.
The non-GAAP operating margin for the fourth quarter of 2024 is expected to be between 26.5% and 27%.
GMV for the fourth quarter is projected to be between $18.9-$19.3 billion.
Non-GAAP earnings per share are anticipated between $1.17 and $1.22.
EBAY’s Near-Term Prospect Steady
The consensus mark for 2024 earnings is pegged at $4.83 per share, unchanged over the past 30 days, and up 13.92% from the year-ago quarter.
The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.21 per share, down by a cent in the past 30 days and indicating a year-over-year growth of 13.08%.
EBAY’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 3.33%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for 2024 revenues is pegged at $10.3 billion, indicating year-over-year growth of 1.85%.
The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $2.59 billion, indicating year-over-year growth of 1.06%.
EBAY’s Shares: Buy, Hold or Sell?
EBAY shares are currently fairly priced, as suggested by a Value Score of B.
However, sluggish active user growth and intense competition in the Retail-Wholesale sector hurt EBAY’s prospects.
EBAY currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a better time to enter EBAY shares.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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.
