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EBay (EBAY) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, eBay (EBAY) closed at $52.54, marking a -1.17% move from the previous day. This change lagged the S&P 500's 0.81% loss on the day. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq lost 1.27%.

Prior to today's trading, shares of the e-commerce company had lost 3.49% over the past month. This has lagged the Retail-Wholesale sector's gain of 7.71% and the S&P 500's gain of 5.06% in that time.

EBAY will be looking to display strength as it nears its next earnings release. In that report, analysts expect EBAY to post earnings of $0.86 per share. This would mark year-over-year growth of 28.36%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.70 billion, up 2.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.58 per share and revenue of $10.78 billion. These totals would mark changes of +26.5% and -0.22%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for EBAY. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. EBAY is currently a Zacks Rank #3 (Hold).

Looking at its valuation, EBAY is holding a Forward P/E ratio of 14.84. For comparison, its industry has an average Forward P/E of 52.23, which means EBAY is trading at a discount to the group.

We can also see that EBAY currently has a PEG ratio of 1.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Commerce stocks are, on average, holding a PEG ratio of 3.49 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 69, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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