51.80 +0.47 (0.92%)
Pre-Market: 7:41AM EST
|Bid||50.26 x 800|
|Ask||53.19 x 900|
|Day's Range||50.06 - 51.94|
|52 Week Range||39.76 - 73.35|
|Beta (5Y Monthly)||0.91|
|PE Ratio (TTM)||61.69|
|Earnings Date||Feb 25, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||63.65|
Investing can be hard but the potential fo an individual stock to pay off big time inspires us. Mistakes are...
Shares of struggling online retail marketplace eBay (NASDAQ:EBAY) have been largely range-bound over the past three years, bouncing between $30 and $40, as the company has struggled to compete in the dynamic e-commerce landscape.But, there's reason to believe that boring eBay stock could surge higher in 2020, thanks to the convergence of a few catalysts.First, revenue growth trends should improve as the company's ad business continues to expand. Core retail trends should also stabilize as the sizable internet sales tax headwind becomes less severe. Second, margin trends should improve, too, as management remains committed to cutting expenses. Third, the company's buyback program will get a big boost from the $3.1 billion sale of StubHub.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNet net, improving revenue growth trends plus improving margin trends plus bigger buybacks, equals supercharged profit growth. At 12.3-times forward earnings, eBay stock is not priced for supercharged profit growth. * 7 Failing Tech Stocks to Disconnect From Now Consequently, the convergence of big growth on a discounted valuation should propel shares meaningfully higher over the coming months. Big(ger) Growth is ComingThe bull thesis on eBay stock heading into 2020 centers around this idea that bigger profit growth is coming in 2020.That is, over the past several years, eBay has struggled to find its way in the crowded, competitive, and dynamic e-commerce landscape. So, while broader e-commerce sales have roared higher, eBay's revenues have struggled to even grow. At the same time, up until last year, eBay's profit margins were under intense pressure. The company's profit growth trends were exceptionally weak.This could all change in 2020. For a few reasons.First, eBay's online garage sale model has staying power because it offers consumers an alternate route to purchasing goods online. Because of its staying power, eBay's core retail growth trends should improve in 2020 once the internet sales tax headwind gets fully lapped. In 2019, U.S. states broadly implemented an internet sales tax which disproportionately hurt small sellers, from whom eBay makes the majority of its money -- by mid-year, eBay will have fully lapped this headwind, so the year-over-year numbers should improve.Even further, eBay's ad business is on fire, and management expects double-digit growth there to persist throughout 2020. Big picture: renewed core retail growth on top of sustained big ad growth should lead to healthy revenue growth for eBay this year.Second, margins will continue to expand meaningfully in 2020 thanks to management's commitment to cost-cutting. Third, the company just sold StubHub for $3.1 billion. Management plans to roll those proceeds into buybacks, and eBay's 2020 share buyback plans have expanded from $1.5 billion, to $4.5 billion.What does stabilizing revenue growth plus expanding margins plus more buybacks equal? Bigger profit growth. eBay Stock is CheapThe attractive thing about eBay stock is that shares aren't priced for bigger profit growth.The forward earnings multiple on this stock is just 12.3. For comparison purposes, the S&P 500 trades at 19x forward earnings, the technology sector trades at 23x forward earnings, and the consumer discretionary sector trades at 24x forward earnings. Also, peer e-retailers like Amazon (NASDAQ:AMZN) and Etsy (NASDAQ:ETSY) trade at 75x and 45x forward earnings multiples, respectively.In other words, eBay stock is dirt cheap.Sure, the cheapness is warranted by weak profit growth trends. But, if those profit growth trends perk up, then eBay stock could fly higher on multiple expansion.That's exactly what will happen in 2020. As bigger profit growth converges on eBay's dirt cheap valuation, the stock's 12.3x forward earnings multiple will meaningfully expand, and power sizable gains in the stock. Bottom LineeBay stock has been a sleeper for a long time. But, shares could wake up in 2020 as stabilizing revenue growth trends, expanding margins, and bigger buybacks fuel sizable profit growth. The combination of sizable profit growth and a dirt cheap valuation should result in the stock having a good year.As of this writing, Luke Lango was long ETSY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Failing Tech Stocks to Disconnect From Now * 5 Ideal Dividend Stocks for New Investors * 4 Stocks to Buy No Matter Who Wins the 2020 Election The post Why Boring eBay Stock Could Charge Up in 2020 appeared first on InvestorPlace.
Etsy (ETSY) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Six months after being acquired by Etsy for $275 million, Chicago music gear marketplace Reverb has a new CEO. Reverb announced Tuesday that it has hired David Mandelbrot as its next chief executive officer. Mandelbrot was previously the CEO of Indiegogo, the popular crowdfunding site that has helped people raise more than $1 billion for their projects.
Reverb, a leading online marketplace for buying and selling new, used, and vintage musical instruments, has named David Mandelbrot Chief Executive Officer, effective January 28, 2020. Mandelbrot has more than two decades of leadership experience within the technology, media, and entertainment industries.
With the new year comes a new decade, and investors are on the lookout for the names that have what it takes to outperform the market and to deliver solid returns in the years to come. However, given the uncertainty hanging over the market, zeroing in on the most compelling investment opportunities isn’t an easy job. So what’s an investor to do? We suggest following Wall Street’s lead as the analysts can provide a wealth of investing inspiration. Investment banking firm RBC Capital sits at the very summit of TipRanks’ top performing research firms. RBC's analysts have consistently delivered returns when guiding investors to the right stocks – hence the elevated position. Naturally, the company is constantly on the look-out for fresh opportunities. With this in mind, we decided to look at 3 internet stocks RBC thinks present opportunity right now.We used TipRanks’ Stock Screener tool to get the lowdown. The tool factors in analyst consensus ratings, price targets, and stock analysis, amongst others, to help us see what the future might have in store for the tickers at hand. It turns out that in addition to RBC’s recommendations, all 3 currently have a Strong Buy consensus rating and, furthermore, all offer upside potential of more than 20%. Let's take a closer look.GoDaddy (GDDY)Investors are constantly in search of growth stocks. GoDaddy has proven to be a successful growth story since going public in 2015. Although it only exhibited modest gains in 2019, it is still up by 175% since its initial listing.GoDaddy provides individuals and businesses with everything they need to get a website up and running – from domains and web hosting to design and templates. Additionally, it offers cloud-based services, online storage and bookkeeping tools, amongst other offerings. The domain business makes up the bulk of sales, providing 46%, while hosting makes up 38% of revenue. An additional 16% is taken up by business apps.GoDaddy will report Q4 results next month, and following a strong Q3 report, RBC’s Mark Mahaney thinks the company’s robust capital flexibility leaves it well positioned. The 5-star analyst believes GoDaddy can drive shareholder value through reinvestments, mergers and acquisitions, and share repos.Mahaney said, “While some bears may point to a potential change in GoDaddy’s long term growth algorithm (high-teens-plus unlevered FCF growth) under new leadership, we think current valuation is pricing in much of this risk. More importantly, GoDaddy has the capital flexibility for further investments ($1.45B Net Debt, 2x net leverage which is below its historical ratio). Though we forecast a slight deceleration in FCF growth (+15% 3-yr CAGR through 2022) -- partially due to law of large numbers, partially due to reinvestments -- we continue to view GoDaddy’s risk/reward as attractive here, trading at ~17x our 2020 FCF estimates.”The above factors are enough for Mahaney to keep an Outperform rating on GDDY. The analyst keeps his price target intact, too. At $81, the number provides possible upside of 12.5%. (To watch Mahaney’s track record, click here)All in all, the Street is bullish on the web domain provider. All 8 analysts tracked over the last 3 months rate GoDaddy a Buy. The Strong Buy consensus rating comes with an average price target of $89.29, implying potential upside of 24%. (See GoDaddy stock analysis on TipRanks) CarGurus Inc (CARG)CarGurus is the US’s largest online auto marketplace, with almost 3 times more traffic than its nearest competitor. CarGurus will be in the spotlight when it reports fourth-quarter results on February 13.RBC’s Mark Mahaney forecasts Q4 revenue of $155 million, a touch above the Street’s estimate of $154.6 million and the company’s guidance of $152.2 million. The analyst forecasts Non-GAAP EPS of $0.14, slightly more than the Street’s $0.13 and beating the high-end guidance of $0.12.Last week, CARG announced it had acquired car shopping platform Autolist. The innovative platform has over 1.3 million monthly visitors to its website, while its mobile app numbers 400,000 visitors a month. The acquisition is timely, as Mahaney thinks the debate over CarGurus’ future potential centers around its growth curve. The 5-star analyst argues CARG has enough CGIs (Growth Curve Initiatives) in both its products (digital marketing solutions for dealers, delivery, consumer finance and P2P) and markets (Canada & Western Europe) to stabilize sales growth and eventual acceleration.Mahaney said, “We continue to see CARG as the leading marketplace in the U.S. Online Used Car segment, attacking a market that is approximately $14B (U.S. Dealer annual digital marketing spend). The evidence appears strong that CARG has an attractive business model (90%+ Gross Margin, ramping EBITDA margins that we believe can reach 24% by ’22, and consistently positive & growing FCF for the past 4 years).”Accordingly, Mahaney reiterated an Outperform rating on CARG along with a price target of $50. Should the target be met, in addition to car keys, investors pockets will jingle with returns in the shape of 35%.On the Street, the current CarGurus action is a tad quiet, though positive all round. 3 Buy ratings add up to a Strong Buy consensus rating. The average price target is $52.33 and implies upside of a not inconsiderable 41%. (See CarGurus stock analysis on TipRanks)Etsy Inc (ETSY)From one online marketplace to another; Although we move from the noise and grease of the auto industry to something a little quieter and rustic in the vibe of Etsy. The company’s e-commerce platform specializes in a wide range of categories from toys and art to jewelry and clothing, but all have one thing in common - a vintage, handcrafted and homemade flavor.In a somewhat similar manner to both previous tickers, ETSY investors have been concerned with growth. The company’s share price grew at a magnificent pace since its public listing midway through the last decade but pulled back in 2H19 as the growth curve showed signs of slowing down. Despite exhibiting a very healthy revenue increase, following Q3’s earnings call Etsy’s share price lost almost 16% due to relative growth fatigue compared to the prior year’s same period.Mahaney is a believer in the Etsy story. The 5-star analyst ranks Etsy highly and notes that 28% organic revenue growth in Q3 and low-to-mid-20% EBITDA margins are very positive figures.Mahaney said, “Our fundamental Long thesis on Etsy remains intact—a large TAM, a loyal community of sellers/buyers, new marketing initiatives and several GCIs in the form of free shipping, Etsy Ads, Reverb acquisition, product improvements, and international markets, which give us conviction that the company should be able to sustain healthy growth rates… While there may currently be several moving pieces at Etsy, we believe management is taking the right steps to drive overall health and growth of the platform.”So, bottom-line, what does it mean? It means Etsy keeps its Outperform rating from RBC, along with the price target of $68. The figure implies possible upside of 35%.The Street is no less enthusiastic. 11 Buys and only 1 Sell add up to a Strong Buy consensus rating. With an average price target of $63.82, Etsy investors could be adding gains of 26% to their vintage wallets over the next 12 months. (See ETSY stock analysis on TipRanks)
As the gig economy is expected to double in value over the next several years, it is important for investors to keep an eye on some promising investment opportunities within this space Continue reading...
Among the newer generation of internet marketplace stocks, Etsy (NASDAQ:ETSY) is one of the more mature names. The company went public almost five years ago and was in business for a decade prior to that.Source: quietbits / Shutterstock.com Despite its tenure, Etsy has fallen behind marketplace rivals such as Shopify (NYSE:SHOP) and share price performance reflects as much. Amid expectations of slowing growth, Etsy stock stumbled to a 7% loss in 2019 while the S&P 500 and other broader benchmarks surged. Shopify more than tripled.Etsy's 2019 performance is disappointing when considering the strength of the U.S. consumer and economy. The company matches buyers and sellers in areas like clothing, jewelry and vintage items. And it collects a fee on those transactions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe stock even tumbled following a solid third-quarter earnings report, in which the company revealed sales growth of 30% and raised gross merchandise sales (GMS) and revenue guidance. Typically, upbeat guidance should be rewarded by investors. But that wasn't the case for Etsy stock. The negative reaction puts pressure on the fourth-quarter earnings update and 2020 guidance to be spectacular."During the third quarter we launched several transformative initiatives to serve as the building blocks for long-term, sustainable growth," Etsy CEO Josh Silverman said in a statement. "… We are just beginning to see the impact of these initiatives, which we believe further our competitive advantages and will have a more meaningful contribution to our results in 2020 and beyond." Headwinds and OpportunityPerhaps the two biggest hurdles Etsy faces in 2020 are convincing investors last year's GMS and sales growth is somewhat sustainable and prompting market participants to pay up for that growth. That's another way of saying that almost 46 times this year's earnings and 7 times sales, Etsy isn't inexpensive. * 9 Boring Stocks to Buy You Should Never Let Go Of The good news for Etsy is that many of its customers are constantly shopping. Plus, the housing market is strong. The iShares U.S. Home Construction ETF (BATS:ITB) jumped almost 49% last year. And millennials -- a core Etsy demographic -- are entering the home-buying arena in force. The online marketplace operator stands to benefit.While Etsy stock has its critics on Wall Street, it has supporters, too, including RBC Capital analyst Mark Maheny.Maheny likes the 2020 outlook "for the stock given a large, loyal, and growing community of buyers and sellers and multiple growth initiatives, including free shipping, advertising, and product improvements," reports Barron's.The average analyst price target on Etsy is just over $65, but the stock closed barely under $45 on Friday. So something has to give. Either analysts lower their price forecast or the stock starts marching closer to the current consensus target. Bottom Line: Etsy Stock Is UnderappreciatedEtsy isn't as big as some of the aforementioned names and doesn't have the sizzle markets have ascribed to Shopify. But the Brooklyn-based company does have some important factors in its favor. Notably, this isn't some ultra-expensive, nowhere-close-to-profitable internet unicorn.Etsy was actually cash flow positive in the third quarter and ended that period with $856.7 million in cash or cash equivalents. Plus, the company is buying back its own stock, something that mature, financially sound companies do.After repurchasing $2.8 million of its own shares, Etsy may want to consider buying more of its stock before it rallies too much. Another repurchase would serve as an avenue for boosting earnings. Investors may want to follow suit.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy to Kick Off the New Year * 7 Buyout Targets to Watch For 2020 * 9 Boring Stocks to Buy You Should Never Let Go Of The post Despite Narrow Marketplace Focus, Etsy Stock Has Crafty Potential appeared first on InvestorPlace.
Shares of specialty e-retailer Etsy (NASDAQ:ETSY) had a rough 2019. The stock posted a 2019 loss of 5%, while the S&P 500 rallied nearly 30%. The major culprit for the bad 2019 performance from Etsy stock was an ugly third-quarter earnings report in late October, which included mixed third-quarter numbers and a lame fourth-quarter guide.Source: Shutterstock Investors implied from the print that the Etsy growth narrative is materially slowing. As such, they have been selling this richly-valued growth stock in droves ever since. Fortunately for bulls, calendar 2020 could be an entirely different story for Etsy stock.Etsy's growth narrative meaningfully slowed in 2019, as revenue growth rates decelerated and margins came under pressure. This slowing growth converged on what was the stock's richest valuation in years, to ultimately produce significant under-performance in Etsy stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 2019 Winners That Will Be 2020 Losers In 2020, though, Etsy's growth narrative will rebound. Revenue growth rates and margins will re-accelerate higher. These favorable developments will converge on what is presently the stock's cheapest valuation in years, to ultimately produce significant out-performance in Etsy stock.Consequently, I like ETSY in 2020. In a sea of richly valued growth stocks that have come very far, very fast in 2019 and appear to have limited upside potential in 2020, Etsy is a notable exception on all fronts. It has the potential to out-perform in a big way over the next twelve months. The Etsy Growth Narrative Will Rebound in 2020On the revenue growth front, Etsy's revenue growth rate slowed from nearly 50% exiting 2018, to sub-30% exiting 2019. This slowdown will come to an end in 2020, and revenue growth rates will stabilize in the 25- to-30% range, for a few reasons.First, consumer spending trends in the U.S. will pick up as the economy rebounds, leading to higher e-commerce spend, and more spend through Etsy. Second, digital ad spend trends will improve with economic improvements, providing solid tailwinds for Etsy's new ad business to gain significant traction. Third, Reverb's take-rates should move higher as Etsy normalizes the platform's transaction fee to match their own transaction fee.Meanwhile, profit margins -- which compressed nearly 100 basis points last quarter -- should get back to expanding in 2020. Stabilizing revenue growth in the 25%-plus range will couple with moderating expense growth to drive positive operating leverage. At the same time, the ad business is particularly high-margin. As it gains traction in 2020, ad revenues should provide an upward lift to the company's margin profile.Broadly, then, slowing revenue growth and compressing margins at Etsy in 2019 will turn into accelerating revenue growth and expanding margins in 2020. This pivot from slowing growth to rebounding growth will provide support for a strong 2020 rally in Etsy stock. Etsy Stock Will Run Above $50My numbers indicate that Etsy stock has runway to levels materially above $50 in 2020.The company has solidified its positioning as a niche specialty online retail marketplace for all things creative, where buyers and sellers from the across the globe can meet to buy and sell handmade arts and crafts goods they can't find anywhere else (Etsy survey data indicates that 78% of Etsy buyers said they are buying products on Etsy which they can't find anywhere else).Sure, this market isn't that big. But it's still sizable, with total retail spend on these "special" products pegged at around $100 billion. Etsy owns just about 5% of this market. That's up from 3% share in 2016. This share expansion will persist for the foreseeable future, mostly thanks to e-retail adoption tailwinds (global e-commerce spend is projected to grow at a 15%-plus pace for the next several years). As this happens, Etsy will likely sustain 15-20% revenue growth.Over that stretch, expense growth will moderate as the company starts leveraging size and reputation to drive sales, not marketing spend. Moderating expense growth on top of sustained big revenue growth will drive positive operating leverage, and profit margins should expand.15%-20% revenue growth on top of steady margin expansion should drive 25%-plus profit growth. Consequently, my modeling pegs Etsy's 2025 earnings per share potential at roughly $3.50. Based on a consumer discretionary sector-average 22-times forward earnings multiple, that implies a 2024 price target for Etsy stock of $77. Discounted back by 10% pear year, that equates to a 2020 price target of almost $53. Bottom Line on ETSY StockThe 2020 bull thesis on Etsy stock is pretty simple.Etsy stock didn't have a good 2019. This under-performance positions the stock to have a good 2020. The things which hurt Etsy stock in 2019 will reverse course in 2020. That is, revenue growth rates will stabilize and margins will rebound.These favorable reversals will converge on Etsy's cheapest valuation in years. That convergence will spark a big 2020 rally in Etsy stock.As of this writing, Luke Lango was long ETSY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 2019 Winners That Will Be 2020 Losers * 5-Year Returns for 5 Dow Jones Stocks Entering 2020 * 5 Semiconductor Stocks to Buy for Big Gains In 2020 The post Etsy Stock Will Bounce Back Above $50 in 2020 appeared first on InvestorPlace.