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EBay (EBAY) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

eBay (EBAY) closed at $52.48 in the latest trading session, marking a +1.35% move from the prior day. The stock lagged the S&P 500's daily gain of 1.6%. Meanwhile, the Dow gained 1.34%, and the Nasdaq, a tech-heavy index, added 2.26%.

Prior to today's trading, shares of the e-commerce company had lost 8.04% over the past month. This has lagged the Retail-Wholesale sector's loss of 4.91% and the S&P 500's loss of 5.3% in that time.

EBAY will be looking to display strength as it nears its next earnings release. On that day, EBAY is projected to report earnings of $0.86 per share, which would represent year-over-year growth of 28.36%. Meanwhile, our latest consensus estimate is calling for revenue of $2.70 billion, up 2.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.58 per share and revenue of $10.78 billion, which would represent changes of +26.5% and -0.22%, respectively, from the prior year.

Any recent changes to analyst estimates for EBAY should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. EBAY is currently a Zacks Rank #3 (Hold).

Looking at its valuation, EBAY is holding a Forward P/E ratio of 14.46. Its industry sports an average Forward P/E of 48.16, so we one might conclude that EBAY is trading at a discount comparatively.

Also, we should mention that EBAY has a PEG ratio of 1.15. 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. The Internet - Commerce industry currently had an average PEG ratio of 3.14 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 74, which puts it in the top 30% 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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Zacks Investment Research