30.78 +0.11 (0.36%)
After hours: 6:35PM EST
|Bid||30.51 x 900|
|Ask||30.78 x 3200|
|Day's Range||30.27 - 30.75|
|52 Week Range||26.01 - 46.99|
|Beta (3Y Monthly)||1.18|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jan 29, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||36.24|
Bill Nygren, The Oakmark Investor Fund portfolio manager, joins the 'Fast Money Halftime Report' to discuss his new stock buys Netflix, Hilton and eBay.
# eBay Inc ### NASDAQ/NGS:EBAY View full report here! ## Summary * Perception of the company's creditworthiness is neutral * Bearish sentiment is low * Economic output in this company's sector is expanding ## Bearish sentiment Short interest | Positive Short interest is extremely low for EBAY with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting EBAY. ## Money flow ETF/Index ownership | Neutral ETF activity is neutral. The net inflows of $10.97 billion over the last one-month into ETFs that hold EBAY are not among the highest of the last year and have been slowing. ## Economic sentiment PMI by IHS Markit | Positive According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Services sector is rising. The rate of growth is strong relative to the trend shown over the past year, and is accelerating. ## Credit worthiness Credit default swap | Neutral The current level displays a neutral indicator. EBAY credit default swap spreads are within the middle of their range for the last three years. Please send all inquiries related to the report to email@example.com. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Apple's typical employee probably makes far less than you think: $55,426 per year. For comparison, the median employee at social media giant Facebook makes more than $240,000 per year. Most likely, that median employee at Apple is not somebody writing code or designing iPhones out of a cubicle in Cupertino, but rather a worker at one of the company's retail stores.
Several well-known internet companies could get purchased in 2019 as buyers turn to companies with recently scaled-back valuations.
Key Questions as Facebook Gets Ready to Report Q4 Results (Continued from Prior Part) ## A $24 billion repurchase authorization As Facebook (FB) prepares to report its earnings for the fourth quarter of 2018, we note that the company last month boosted its share repurchase program by an additional $9.0 billion. The increase brings the company’s repurchase authorization since 2017 to $24 billion, considering that in April 2018 Facebook added $9.0 billion to its repurchase program, which already had a $6.0 billion authorization. Facebook had $3.5 billion remaining in its previous repurchase authorization at the end of September 2018, according to the company’s regulatory filing. Therefore, the latest addition means that Facebook now has $12.5 billion in its repurchase program. ## Companies have lined up fat repurchase programs Besides Facebook, other Internet companies that have lined up fat repurchase programs include Google parent Alphabet (GOOGL), Alibaba (BABA), and eBay (EBAY). In February last year, Alphabet announced an $8.6 billion repurchase program, and Alibaba is in the process of implementing its $6.0 billion two-year repurchase program. eBay had $4.7 billion remaining in its existing repurchase authorization at the end of September. JD.com (JD) recently announced a $1.0 billion repurchase program expiring in 2020. ## Repurchasing 86 million shares With $12.5 billion and the stock trading in the $145 range, Facebook could repurchase more than 86 million shares, or 3.0% of its outstanding shares. Since repurchases reduce the number of shares in circulation, they can lead to companies posting higher earnings per share without actually growing profits. Continue to Next Part Browse this series on Market Realist: * Part 1 - Did Facebook’s Revenue Continue to Grow in Q4? * Part 2 - Did Facebook’s Profitability Improve in Q4? * Part 3 - How Facebook’s Advertising Base Is Trending
The Latest News from Facebook: Can It Rise Over 20% in 2019? (Continued from Prior Part) ## One of the fastest-growing markets As much as the Vietnamese market presents challenges for Facebook (FB), it also presents an attractive growth opportunity. As the Wall Street Journal reported, some 60 million people in Vietnam—or more than 60% of the country’s population—use Facebook’s social network. Vietnam is also said to be one of Facebook’s fastest-growing markets. Vietnam is in Southeast Asia, a region in which the Internet economy is booming. According to a new research report by Google and Temasek Holdings, the Southeast Asian Internet economy will grow to $240 billion by 2025, up from $72 billion in 2018. In Vietnam alone, the Internet economy is on track to hit $33 billion by 2025, up from $9.0 billion in 2018. ## e-Commerce opportunity in Vietnam People in Vietnam use Facebook not only to connect with family and friends but also to sell items, exposing Facebook to the fast-growing e-commerce market in the country. The e-commerce market in Vietnam was valued at $0.4 billion in 2015 and is poised to grow to $15 billion by 2025. ## Monetizing the marketplace Facebook created a marketplace within its social network, allowing individuals and businesses to buy and sell items directly within its platform. It monetizes the marketplace through advertising, but there are other monetization options it could pursue. For example, e-commerce companies such as Amazon (AMZN) charge merchants a commission to be able to sell on their marketplaces. In addition, these e-commerce companies make loans to their marketplace sellers from which they earn interest revenue. Last year, eBay (EBAY) tapped Square (SQ) to extend small business loans to its sellers. PayPal (PYPL), which also runs a merchant lending business, is Facebook’s marketplace payment partner. Continue to Next Part Browse this series on Market Realist: * Part 1 - Did Facebook Break Vietnam’s Cybersecurity Law? * Part 3 - A Look at Facebook’s Efforts to Avoid Controversies * Part 4 - Initiative CEO Advises Clients to Boycott Facebook Advertising
Alibaba (BABA) unveils A100 business partnership program that offers companies with solutions to accelerate digital transformation.
Sites like Amazon and eBay have made it very compelling for consumers to buy online rather than in stores, in part because prices are very competitive and in many cases cheaper than what buyers might find in traditional retailers. The UK's tax authority has 'red-flagged' 4,600 online merchants, from a total of 7,000 investigations, in the last two years that have been evading sales taxes on goods sold in the UK on major marketplace sites like Amazon and eBay. Many of those online stores have been shut down and deleted as a result, while those now selling to UK buyers legitimately are giving the UK's tax coffers a £205 million ($255 million) boost.
It's been a wild roller-coaster ride for eBay (NASDAQ:EBAY) over the past two years. After reaching a high of $46.99 early last year, the eBay stock price is currently at January 2017 levels. Over the past 12 months, EBAY is down almost 25%, whereas S&P 500 is down about 7%. As Wall Street debates what is next for EBAY shares, I am of the cautiously optimistic bull camp. Here is why… InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Morgan Stanley: 7 Risky Stocks to Sell Now ### eBay Still Is a Powerhouse In Q3 2018, the eBay platform had 177 million active users in 190 countries, up from 175 million in Q2. eBay's mobile shopping app is one of the most popular in the U.S. with an audience reach of over 30%. Its management is looking for ways to further capitalize on the strength of these user numbers to improve the balance sheet through two key drivers, i.e., advertising and payments. The company is fast growing its Promoted Listings (revenues paid for by sellers). It now represents a third of eBay's total advertising revenue. In 2020, the company will finish its back-end services provider agreement with PayPal (NASDAQ:PYPL) and replace it with the Dutch payments business Adyen (OTCMKTS:ADYYF). eBay aims to control the checkout process better and reach out to more sellers and buyers alike. It is also banking on Adyen providing a cheaper payments platform than PayPal and that most sellers will realize cost savings in the payments processing. ### Could eBay Sell Subsidiaries? Over the past two decades, the company has made more than 50 acquisitions. Now eBay operates via a plethora of U.S. and international subsidiaries. The company has a P/E ratio of 13, historically a low number. At the current valuation levels, several activist investors may be interested in the company, for example, to buy a large stake in it or to force it to sell some of its businesses like StubHub, its ticket marketplace. After all activist investors had showed an interest in eBay before. In 2015, it formally spun off PayPal. In 2017, it sold its Indian ecommerce company to Flipkart (Walmart (NYSE:WMT) later bought a majority stake in Flipkart). This year might witness more sales by eBay as it unloads a few of its holdings and put the cash to better use for revenue generation. Another sale could help propel the eBay's share price up fast. ### Shorter-term Technical Analysis After this year's selloff, eBay stock has suffered from a damaging technical picture. However, the past few weeks have seen the chart and the indicators start stabilizing. Any future weakness toward the mid-$20's level could represent a buying opportunity for long-term investors in eBay. In the coming months, the first target would be $32.5 and then $37.5. EBAY stock warrants a "slowly accumulate" at its current levels, and over the longer-term, it represents a good buying opportunity. ### What Could Derail EBAY Stock? The main issue I find with eBay is its current lack of focus in the highly competitive world of online sales. In 1995, the company started as an auction marketplace -- mainly for lower-priced used goods; but now selling via buy now option has become as common as the auctions. In other words, many individuals would probably not be able to differentiate eBay from Amazon (NASDAQ:AMZN). Amazon has recently cut its fees for sellers especially on cheaper items, and eBay sellers have noticed the potential savings as well as the power of Amazon's platform. The competition also has meant lower margins and a flat bottom line, contributing to the share price decline in 2018. eBay's struggle to re-invent itself with a niche offering may further hamper the earnings. ### The Bottom Line on eBay Stock If you are willing to stay in EBAY stock 3-4 years, you are likely to find value in the stock. I trust that the management will work through the main issues surrounding the focus of the company as well as the competitive environment and the stock will reward patient investors handsomely. eBay may also find itself in the middle of a bidding war for various parts of its business. As of this writing, Tezcan Gecgil has no positions in any securities mentioned. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Buy eBay Stock If You Have the Time and the Fortitude appeared first on InvestorPlace.
eBay (EBAY) operates three growing and highly cash generative businesses that connect buyers and sellers of lower volume, harder-to-find items. The eBay marketplace matches more than 175 million buyers with one billion items, listed by more than 25 million sellers. Amazon is the premier online destination for new, in-season goods while eBay's marketplace primarily serves consumer demand for used, off-season or off-price items.
The Oakmark Fund decreased 17.3% during the fourth quarter, which compares to a decline of 13.5% for the S&P 500. Accordingly, we took advantage of unusually high volatility during the quarter to increase the share positions of stocks we believe are most undervalued, while reducing our positions in stocks that had performed better and, therefore, had become less attractive. Warning! GuruFocus has detected 2 Warning Signs with UNH.
The Latest Deals and Strategies at Amazon and Alibaba (Continued from Prior Part) ## Disgruntled investors pursued Alibaba Alibaba (BABA) has entered into an agreement to settle a California class action lawsuit that alleges the company violated the United States Securities Act of 1933, a regulation that deals with transparency in the sale of securities to the public in the United States. The lawsuit was brought forward in October 2015, one year after Alibaba’s IPO in the United States. The suit was brought on behalf of investors who had purchased Alibaba shares and felt that the company had failed to provide full public disclosure of its securities so that potential investors could make fully informed buying decisions. ## Alibaba to pay $75 million for the settlement Alibaba agreed to pay $75 million to settle the lawsuit without admitting to any wrongdoing. The settlement covers investors who purchased Alibaba shares on or before October 5, 2015. Alibaba expects the court to approve the settlement by April so that it can put the matter behind it. The settlement is unlikely to have a big impact on Alibaba’s finances, as the company said it anticipates the settlement payment to come from its directors and officers liability insurance. Alibaba is facing another lawsuit related to its IPO in New York, which remains unresolved. ## Alibaba’s revenue jumped 54% Alibaba generated $12.4 billion in revenue in its second quarter of fiscal 2019, which ended on September 30. Its revenue rose 54% YoY (year-over-year) in the quarter. Etsy (ETSY), Amazon (AMZN), and JD.com (JD) grew their revenues 41%, 29%, and 25% YoY, respectively, in the comparable quarter. Revenue rose 6.0% YoY at eBay (EBAY) in the period. Continue to Next Part Browse this series on Market Realist: * Part 1 - Exploring Amazon’s Appetite for More Retail Outlets * Part 2 - The Numbers Support Amazon’s Physical Store Push * Part 3 - Why Whole Foods’ Losses May Not Bother Amazon
Can Etsy’s Good Run Continue in 2019? (Continued from Prior Part) ## PE valuation On January 4, Etsy (ETSY) was trading at a 12-month forward PE ratio of 69.8x. Meanwhile, its larger peers Alibaba (BABA) and eBay (EBAY) are trading at forward PE multiples of ~22.0x and ~11.2x, respectively. Amazon (AMZN) is trading at a forward PE multiple of ~59.0x. ## EPS growth estimates for Etsy For Etsy, analysts expect fiscal 2018 EPS at $0.50, representing growth of 4.2% on a year-over-year basis. For fiscal 2019, its adjusted EPS are expected to increase 42.0% year-over-year to $0.71. Higher revenues and share repurchases could cushion Etsy’s EPS performance. In November, the company announced a $200 million share repurchase authorization. However, the company is facing rising operating expenses. In the third quarter, expenses rose 35.3%. The company is investing in digital marketing and migration to the cloud. In 2018, it has projected cloud migration expenses at the higher end of its guided range of $10 million–$15 million. However, cloud migration will likely reduce its data center infrastructure expenses. Over the past three quarters of 2018, Etsy has missed analysts’ estimates once but reported year-over-year deterioration in two of three quarters. Its earnings performance in 2018 suffered from an unfavorable year-over-year comparison due to a tax benefit, related to employee stock options, received in 2017. ## Analysts’ EPS projections for peers For fiscal 2018, Amazon’s adjusted EPS are estimated at $19.83, compared to $4.56 in fiscal 2017. For fiscal 2019, Its adjusted EPS are forecast at $26.76, representing year-over-year growth of 34.9%. For fiscal 2018, analysts expect eBay’s adjusted EPS at $2.30, reflecting year-over-year growth of 15.0%. For fiscal 2019, analysts project eBay’s adjusted EPS at $2.59, representing a year-over-year increase of 12.6%. In fiscal 2019 (ending in March 2019), analysts expect Alibaba’s EPS at $35.61, growing 8.4% year-over-year. For fiscal 2020, analysts expect Alibaba’s EPS at $46.11, implying 29.5% year-over-year growth. Browse this series on Market Realist: * Part 1 - Why Etsy Surged ~8.0% in the Last Trading Session * Part 2 - Will Etsy’s Strategic Efforts Keep Driving Its Top Line in 2019?
eCommerce Updates: eBay, JD, and Shopify (Continued from Prior Part) ## Roughly $2.0 billion in cash Last month, Shopify (SHOP) raised about $400 million through the sale of 2.6 million new shares. The company said it intended to use the proceeds from the sale of shares to strengthen its balance sheet, which should provide more flexibility to fund its growth strategy. Shopify exited the third quarter of 2018, the most recent reported period, with $1.6 billion in cash. The sale of new shares placed the company on track to close 2018 with $2.0 billion in cash. ## Making cash advances to merchants Shopify has been pursuing growth by creating new products, acquiring other companies, launching in more countries, and extending credit to its merchant clients to help them grow their businesses. In the third quarter of 2018, Shopify extended $76.4 million in cash advances to its merchant clients, raising its total cash advances to $375 million since 2016. Extending cash advances or loans to merchants has become a popular strategy for ecommerce companies to try to drive growth. Amazon (AMZN) has extended more than $3.0 billion in loans to tens of thousands of sellers on its marketplace. Last year, eBay (EBAY) tapped Square (SQ) to extend small loans to its sellers. PayPal (PYPL) also makes small business loans and has written more than $6.0 billion in such loans since 2013. ## Revenue jumped 58% Shopify’s revenue rose 58% year-over-year to $270 million in the third quarter of 2018. It guided for fourth-quarter revenue in the range of $315 million–$325 million. Shopify is expected to report its fourth-quarter results on January 24. Browse this series on Market Realist: * Part 1 - Why Morgan Stanley Downgraded eBay * Part 2 - JD Mall’s Restructuring Plans: What You Need to Know * Part 3 - How JD Will Fund Its $1.0 Billion Repurchase Program
The Latest Deals and Strategies at Amazon and Alibaba (Continued from Prior Part) ## Leveling the retail playing field in India Amazon (AMZN) is set to encounter a different retail environment in India in 2019. As Reuters reported, India has introduced new rules that will ban e-commerce companies such as Amazon from selling products from companies in which they own an equity interest. In addition, the rules will prohibit e-commerce companies from entering into exclusive agreements with sellers. The rules, which the Indian government has portrayed as meant to level the playing field in the country’s retail industry, are scheduled to take effect on February 1. ## Amazon is expected to take a hit It’s common for large e-commerce companies to try to attract customers with exclusive products and steep discounts through special arrangements with their subsidiaries or affiliates. India’s new e-commerce rules could make life tougher for Amazon and Walmart (WMT), according to CNN. Walmart owns Flipkart, one of India’s top e-commerce companies. ## India presents a $72 billion e-commerce opportunity Amazon is currently evaluating India’s new e-commerce rules. India’s retail e-commerce market was estimated to be $32.7 billion in 2018, and it’s poised to grow to $71.9 billion by 2022, according to data from eMarketer. Other than Amazon and Walmart, other foreign companies pursuing the opportunity in India’s e-commerce industry include Alibaba (BABA) and eBay (EBAY). Alibaba backs Paytm, one of India’s leading e-commerce and mobile payment providers. Last year, Berkshire Hathaway (BRK) invested ~$350 million in a small stake in Paytm, according to CNBC. eBay announced last year that it was relaunching in India with operations focused on cross-border trade. Continue to Next Part Browse this series on Market Realist: * Part 1 - Exploring Amazon’s Appetite for More Retail Outlets * Part 2 - The Numbers Support Amazon’s Physical Store Push * Part 3 - Why Whole Foods’ Losses May Not Bother Amazon
eCommerce Updates: eBay, JD, and Shopify (Continued from Prior Part) ## Company holding $6.2 billion in cash JD.com (JD) is planning to repurchase up to $1.0 billion of its shares over the next 12 months. The company intends to fund its share repurchase program with its existing cash balance. JD closed the third quarter of 2018, the most recent reported period, with $6.2 billion in cash. JD announced the repurchase program after its stock plunged in 2018 alongside other major Chinese Internet companies amid a slowing domestic economy and grinding trade war with the United States. JD shares plunged about 50% in 2018. Baidu (BIDU) and Alibaba (BABA) shares fell about 35% and 25%, respectively, in 2018. ## Chinese companies line up repurchase programs In addition to JD, the other Chinese Internet companies that have lined up large repurchase programs include Baidu, Alibaba, and Tencent (TCEHY). Baidu announced a $1.0 billion repurchase program in June, and $513 million remained in that program at the end of September. Alibaba is planning to repurchase up to $6.0 billion of shares in the next two years. For its part, Tencent has board authorization to repurchase up to 10% of its outstanding shares. eBay (EBAY) is another ecommerce company that has lined up a generous repurchase program. The company had $4.7 billion remaining on its existing repurchase authorization at the end of September. ## JD’s revenue jumped 25% JD generated $15.3 billion in revenue and made over $400 million in profit in the third quarter of 2018. Its revenue rose 25% year-over-year. Continue to Next Part Browse this series on Market Realist: * Part 1 - Why Morgan Stanley Downgraded eBay * Part 2 - JD Mall’s Restructuring Plans: What You Need to Know * Part 4 - Shopify’s Recent Fundraising: Must-Knows
Could Amazon’s Fourth-Quarter Results Beat Analysts’ Expectations? (Continued from Prior Part) ## EPS expected to be $5.53 In October, Amazon (AMZN) announced it was raising its US and UK workers’ starting wage, effective November 1. Higher wages can boost workers’ morale and productivity. However, they also mean additional costs, which can impact profits. How did Amazon’s bottom line fare in the fourth quarter after the company raised wages? We’ll find out when the company reports its fourth-quarter results. On average, analysts expect the company to report EPS of $5.53. ## EPS exceeded analysts’ expectation last year Amazon made a profit of $1.9 billion in the fourth quarter of 2017, translating to EPS of $3.74 and beating analysts’ consensus EPS estimate of $1.83. Alibaba (BABA) and Etsy (ETSY) had EPS of $1.41 and $0.36, respectively, in the fourth quarter of 2017, whereas eBay (EBAY) and JD.com (JD) posted losses per share of $2.51 and $0.10, respectively. Amazon made $2.9 billion in profit in the third quarter, translating to EPS of $5.75. ## Increased focus on profitability Amazon’s fourth-quarter results are set to come out as the company is focusing on profitability. As we noted recently, Amazon is pushing brands to create product formats that it can sell profitably online. For many years, Amazon has been known for its strategy of prioritizing growth over profits. However, it now appears profitability is taking on new significance at Amazon, which may be necessary considering the company’s rising costs due to wage increases and delivery service expansion to include shipping from Whole Foods Market stores. Continue to Next Part Browse this series on Market Realist: * Part 1 - Could Amazon’s Fourth-Quarter Revenue Beat Analysts’ Expectation? * Part 3 - Amazon Is Losing Ground in a Market It Pioneered * Part 4 - How Amazon Unlocked Its Advertising Potential
The Latest Deals and Strategies at Amazon and Alibaba (Continued from Prior Part) ## Whole Foods isn’t profitable yet According to a recent Wall Street Journal report citing those familiar with the situation at Amazon (AMZN), the company’s Whole Foods business isn’t profitable despite its sales having increased since Amazon took over in 2017 following a $13.7 billion transaction. The lack of profits for Whole Foods can be attributed to Prime discounts, which have hurt the business’s margins. However, given Jeff Bezos’s usual playbook, Whole Foods’ profitability may not be a big priority right now. The Amazon CEO saw the e-commerce giant through years of losses before it began making profits, which have been increasing in recent quarters. Amazon’s profit hit $2.9 billion in the third quarter of 2018 compared to $256 million a year earlier. Alibaba (BABA), eBay (EBAY), and Etsy (ETSY) posted profits of $2.9 billion, $721 million, and $20 million, respectively, in the third quarter of 2018. JD.com (JD) reported a profit of ~$400 million in the same period. ## Using Whole Foods to promote Prime Amazon has been using Whole Foods to try to drive the uptake of its Prime membership program, which could create more profit opportunities for the company down the road. Prime members pay a $119 annual subscription fee and enjoy a range of benefits, including exclusive discounts on items, free express delivery, and video and music streaming services. Amazon disclosed last year that it served over 100 million Prime members globally. The company generated $3.7 billion in subscription services revenue in the third quarter of 2018, with the amount primarily coming from Prime membership fees. Continue to Next Part Browse this series on Market Realist: * Part 1 - Exploring Amazon’s Appetite for More Retail Outlets * Part 2 - The Numbers Support Amazon’s Physical Store Push * Part 4 - What Next for Amazon in India amid New Retail Rules?
eCommerce Updates: eBay, JD, and Shopify (Continued from Prior Part) ## JD Mall reorganized into three groups JD.com (JD) has announced a restructuring plan that will see its main business, JD Mall, split into three groups, the South China Morning Post reported. One of the groups will be responsible for studying customer behaviors and market changes. Another group will be responsible for providing services that satisfy customer demands, likely building on the findings of the first group. The third group will handle everything from infrastructure building to risk management. JD is betting on the restructuring plan to help it achieve quality growth and better position itself to serve customers in an ever-changing business environment. JD is in tight competition with Alibaba (BABA) for control of the ecommerce market in China—its domestic market. Overseas, JD is battling Amazon (AMZN), eBay (EBAY), and a host of other rivals for ecommerce revenue. ## JD’s active customers decreased JD exited the third quarter of 2018 with 305.2 million active customers, down from 313.8 million in the second quarter and marking the first time that the company registered a decline in its active customer base. Alibaba and eBay closed the third quarter with 601 million and 177 million active customers, respectively, both increasing from the previous quarter. Amazon doesn’t disclose its customer metrics. It only said last year that its Prime membership program had attracted more than 100 million subscribers globally. ## JD collaborating with Google JD’s revenue rose 25% year-over-year to $15.3 billion in the third quarter. JD is collaborating with Google (GOOGL) to help accelerate its international expansion. Google owns a small stake in JD, following an investment of $550 million in the Chinese ecommerce giant in June. Continue to Next Part Browse this series on Market Realist: * Part 1 - Why Morgan Stanley Downgraded eBay * Part 3 - How JD Will Fund Its $1.0 Billion Repurchase Program * Part 4 - Shopify’s Recent Fundraising: Must-Knows
Could Amazon’s Fourth-Quarter Results Beat Analysts’ Expectations? ## Fourth-quarter revenue expected to be $71.9 billion Amazon (AMZN) is expected to release its fourth-quarter results on January 24. On average, analysts expect the company to report revenue of $71.9 billion. In October, Amazon set a goal to deliver fourth-quarter revenue of $65 billion–$72.5 billion, suggesting the company may beat analysts’ expectation. ## Upward trend In the fourth quarter of 2017, Amazon’s revenue rose 38.2% YoY (year-over-year) to $60.5 billion, putting it among the fastest-growing large e-commerce companies. Alibaba’s (BABA), JD.com’s (JD), eBay’s (EBAY), and Etsy’s (ETSY) revenue grew 56%, 38.7%, 9.1%, and 23.7% YoY, respectively, in the fourth quarter of 2017, while Groupon’s (GRPN) fell 3.5% YoY. Amazon’s revenue rose 29% YoY to $56.6 billion in the third quarter (ended September), 39% YoY in the second quarter, and 43% YoY in the first quarter. ## Retail, advertising, and cloud businesses driving growth Gains in retail, advertising, and cloud computing have been behind Amazon’s healthy top-line growth recently. In the retail market, for instance, its acquisition of Whole Foods Market has allowed Amazon to expand in the retail food business, enabling the company to capture more household spending. Continue to Next Part Browse this series on Market Realist: * Part 2 - How Amazon’s Wage Hikes Could Affect Its Bottom Line * Part 3 - Amazon Is Losing Ground in a Market It Pioneered * Part 4 - How Amazon Unlocked Its Advertising Potential
eCommerce Updates: eBay, JD, and Shopify ## Stock downgraded and price target lowered Morgan Stanley downgraded eBay (EBAY) stock to “equal-weight” from “overweight” last month, according to a note to investors cited by CNBC. At the same time, the firm cut its 12-month price target on eBay stock from $55 to $33. Before it upgraded eBay to “overweight” in April, Morgan Stanley had an “underweight” rating on the stock. In downgrading eBay, Morgan Stanley noted that the company’s gross merchandise value (or GMV) growth was slower than it expected in 2018 and that it expects the slowdown to continue in 2019. For ecommerce companies, GMV measures the total value of items sold over a given period. eBay’s GMV was $22.7 billion in the third quarter of 2018, up 5.0% year-over-year. But the GMV growth slowed from 8.0% in the third quarter of 2017. ## Emerging revenue opportunity in payments and advertising In addition to deteriorating GMV growth, Morgan Stanley also cited stiff competition in the ecommerce industry as another major challenge eBay faces. But the firm also noted that eBay has attractive emerging revenue opportunities in the payments and advertising markets. With more online shoppers beginning their product search on marketplaces, ecommerce platforms like eBay have taken on new significance as advertising spots for brands seeking to connect with consumers. ## eBay’s revenue rose 6.0% eBay generated revenue of $2.6 billion in the third quarter of 2018, representing an increase of 6.0% year-over-year, compared to revenue growth of 58% at Shopify (SHOP), 54% at Alibaba (BABA), and 29% at Amazon (AMZN). JD.com (JD) grew its revenue 25%. Continue to Next Part Browse this series on Market Realist: * Part 2 - JD Mall’s Restructuring Plans: What You Need to Know * Part 3 - How JD Will Fund Its $1.0 Billion Repurchase Program * Part 4 - Shopify’s Recent Fundraising: Must-Knows