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EBay (EBAY) Gains As Market Dips: What You Should Know

Zacks Equity Research

eBay (EBAY) closed the most recent trading day at $29.41, moving +0.75% from the previous trading session. The stock outpaced the S&P 500's daily loss of 1.51%. At the same time, the Dow lost 1.69%, and the tech-heavy Nasdaq lost 1.53%.

Prior to today's trading, shares of the e-commerce company had lost 21.57% over the past month. This has lagged the Retail-Wholesale sector's loss of 12.87% and the S&P 500's loss of 18.13% in that time.

Wall Street will be looking for positivity from EBAY as it approaches its next earnings report date. On that day, EBAY is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 10.45%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.34 billion, down 11.59% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.07 per share and revenue of $9.66 billion, which would represent changes of +8.48% and -10.59%, respectively, from the prior year.

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Investors might also notice recent changes to analyst estimates for EBAY. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. EBAY is currently a Zacks Rank #2 (Buy).

In terms of valuation, EBAY is currently trading at a Forward P/E ratio of 9.52. This represents a discount compared to its industry's average Forward P/E of 18.87.

It is also worth noting that EBAY currently has a PEG ratio of 0.82. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Commerce industry currently had an average PEG ratio of 1.22 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow EBAY in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research