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Ebay Stock Gears Up For Q2 Earnings Report

Fernanda Horner

The shares of eBay Inc (NASDAQ: EBAY) are up 0.2% at $55.24 this afternoon, just a few days ahead of the company's second-quarter report, due after the close on Tuesday, July 28. Below, we will look at how the stock has performed on the charts of late, and explore some of the options activity surrounding EBAY ahead of the event.  

Digging deeper, the equity has completely recovered from its mid-March lows near the $26 level. Shares have been on a steady climb since April, breaking record highs on a monthly basis, with the equity's latest all-time-high coming in at $61.06 on July 13. And while the stock has cooled off from that peak, its 30-day moving average has contained its latest pullback. Longer term, EBAY is performing particularly well, and sports a 51.9% lead year-to-date.


EBAY

Analysts are split on the equity. Of the 23 in coverage, 13 carry a tepid "hold" rating, while the remaining 10 sport a "strong buy". Meanwhile, the stock's 12-month consensus target price of $55.62 is right in line with current levels.

The options pits, however, show calls are more popular. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EBAY sports a 10-day call/put volume ratio of 4.11 which sits in the 90th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets over the past two weeks.


Lastly, a look at the equity's history of post-earnings reactions during the past two years shows a generally positive response. During its last eight reports, more than half of these next-day sessions were higher, including a 5.9% jump in October 2018. The security averaged a post-earnings swing of 5% the last eight quarters, regardless of direction. This time around, the options market is pricing in a much bigger move of 8.2%.