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

Zacks Equity Research
·3 min read

In the latest trading session, eBay (EBAY) closed at $50.86, marking a +1.23% move from the previous day. This move outpaced the S&P 500's daily loss of 0.22%. Elsewhere, the Dow lost 0.23%, while the tech-heavy Nasdaq lost 0.38%.

Coming into today, shares of the e-commerce company had lost 0.38% in the past month. In that same time, the Retail-Wholesale sector lost 1.62%, while the S&P 500 gained 2.78%.

EBAY will be looking to display strength as it nears its next earnings release. In that report, analysts expect EBAY to post earnings of $0.84 per share. This would mark year-over-year growth of 3.7%. Our most recent consensus estimate is calling for quarterly revenue of $2.71 billion, down 3.79% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.41 per share and revenue of $10.12 billion, which would represent changes of +20.49% and -6.31%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for EBAY. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, EBAY is holding a Forward P/E ratio of 14.75. For comparison, its industry has an average Forward P/E of 49.76, which means EBAY is trading at a discount to the group.

Meanwhile, EBAY's PEG ratio is currently 1.11. 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. EBAY's industry had an average PEG ratio of 2.6 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 215, putting it in the bottom 16% 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