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EBay (EBAY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

eBay (EBAY) closed at $52.38 in the latest trading session, marking a +0.54% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.53%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq added 1.42%.

Coming into today, shares of the e-commerce company had lost 5.42% in the past month. In that same time, the Retail-Wholesale sector lost 3.37%, while the S&P 500 lost 3.76%.

EBAY will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.05, up 56.72% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.71 billion, up 2.14% from the year-ago period.

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 -0.15%, respectively, from the prior year.

Any recent changes to analyst estimates for EBAY should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. EBAY is currently a Zacks Rank #4 (Sell).

In terms of valuation, EBAY is currently trading at a Forward P/E ratio of 14.55. This valuation marks a discount compared to its industry's average Forward P/E of 49.42.

Investors should also note that EBAY has a PEG ratio of 1.15 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce industry currently had an average PEG ratio of 3.27 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% 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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