EBay Inc. is expected to report earnings on 23/10/2019 after the market close. The report will be for the fiscal Quarter ending September 2019.
After spending Labor Day weekend 1995 at home writing code on his personal computer, eBay founder Pierre Omidyar launched AuctionWeb, a site “dedicated to bringing together buyers and sellers in an honest and open marketplace.” He probably did not imagine that in a few years, it would become eBay, a story of success of the dot-com bubble and one of the world’s top ten largest companies by revenue and market capitalization.
This American multinational e-commerce corporation based in San Jose, California facilitates consumer-to-consumer and business-to-consumer sales through its website. The company manages the eBay website, an online auction and shopping website in which people and businesses buy and sell a wide variety of goods and services worldwide. The website is free to use for buyers, but sellers are charged fees for listing items after a limited number of free listings, and again when those items are sold.
For online business and shops / retail seller companies such as eBay, Amazon & Alibaba, there are a few important factors we need to know to have a better understanding of their financial performance. In this article we will take a look at some of the most important factors; first individually about eBay and then we will compare them with its largest competitors in the market.
First, Sales and Revenue data ( the number of active users, as well as seller rating), will help us to find out the profitability of the company, which is a key indicator to understanding the real worth of it.
According to Zacks Investment Research, based on 11 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.51. The reported EPS for the same quarter last year was $0.43.
In the second quarter of 2019, eBay reached 182 million active buyers worldwide, representing a four percent growth compared to the prior-year quarter.
The company had a $32.661B market capitalization and its share price ranged between $26.01 and $42.00 over the last 52-weeks.
EBay revenue data for Q2 provided a positive outlook for today’s (23 October) earnings report as it showed better than expected growth:
- EBay revenue for the quarter ending June 30, 2019, was $2.687B, a 1.78% increase year-over-year.
- EBay revenue for the twelve months ending June 30, 2019, was $10.856B, a 4.13% increase year-over-year.
- EBay’s annual revenue for 2018 was $10.746B, an 8.25% increase from 2017.
- EBay’s annual revenue for 2017 was $9.927B, a 6.76% increase from 2016.
- EBay’s annual revenue for 2016 was $9.298B, an 8.22% increase from 2015.
You can see this illustrated in the below chart from macrotrends.net:
In more detail, in 2018:
- Total revenue was 10.746 Million.
- Gross profit rose to 8.364 from 7.345B in 2017.
- Net Income rose to 2.530 from -1.016B in 2017.
- EPS rose to 2.58 from -0.95 in 2017.
While eBay has 182 million active buyers globally, gross merchandise volume, the value of all goods sold on its sites, has been declining. It fell by 4.4% year-over-year (YOY) to $22.6 billion in 2Q 2019, Bloomberg notes.
In the last reported quarter (Zacks) records:
“EBay had a positive earnings surprise of 9.68%. The company beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an average positive surprise of 10.35%. EBay had reported second-quarter 2019 non-GAAP earnings of 68 cents per share, which surpassed the Zacks Consensus Estimate by 6 cents and increased 28.3% from the year-ago period. Gross revenues of $2.69 billion increased 2% year over year (up 4% on an Fx-neutral basis) and surpassed the Zacks Consensus Estimate by 0.5%.”
Comparing the company with its largest competitors, Amazon & Alibaba, will make its position in the market clearer.
The chart above clearly shows that Amazon, with 478% growth, is way ahead in the market from both eBay and Alibaba and these two companies with 76% growth in the past five years have very close competition.
S3 S2 S1 R1 R2 R3
34.50 35.90 37.36 40.50 42.35 44.00
37.35 And 34.50, (50 and 200 Week moving average) are key support levels that will be respectively available in case the report comes out lower than expected, while on the flip side, a positive report and better than expected number could lead the market to its all-time high at $46.96, by getting the confirmation and passing the resistance levels mentioned above.
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Ahura Chalki
Regional Market Analyst
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