eBay Inc. NASDAQ: EBAY is an online marketplace featuring auctions and fixed-priced listings for new, used and refurbished merchandise connecting buyers and sellers worldwide. eBay is a veteran internet giant in the retail/wholesale sector that emerged during the internet bubble and has withstood the test of time as one of the world's largest e-commerce sites and digital marketplaces, trailing Amazon.com Inc. NASDAQ: AMZN but towering over Etsy Inc. NASDAQ: ETSY, Shopify Inc. NYSE: SHOP and Mercari Inc. OTCMKTS: MCARY.
eBay has evolved from a high-flying momentum growth stock to a "Steady Eddie" blue chip internet value play that’s trading at just 11X forward earnings, carrying a 2.1% annual dividend yield with a war chest of $17.40 cash per share.
A Collector's Go-To Destination
eBay has evolved into one of the largest marketplaces for collectibles. From toys and comic books to trading cards to sneakers, jewelry, and handbags, eBay provides liquidity for collectors. They've grown the collectibles business with authentication services. Its Authentication Guarantee enables collectors to shop with confidence as experts authenticate items before they receive them. This has helped eBay generate over $10 billion in gross merchandise volume (GMV). Check out the sector heatmap on MarketBeat.
Tokyo Authentication Center
Japan has proven to be one of the world's fastest-growing and largest marketplaces for luxury personal goods. It enables its global collectors to access inventory and liquidity from some of the world's most exclusive brands.
The company established its eighth authentication center in Tokyo, Japan, which is its first center focused primarily on cross-border trade. The Tokyo center currently authenticates luxury handbags and plans to expand to other categories in time. Its Authenticity Guarantee Program has been expanded to cover loose gemstones in collaboration with the Gemological Institute of America. Get AI-powered insights on MarketBeat.
Steady Eddie Growth and Profitability
eBay reported Q4 2023 EPS of $1.07, beating $1.03 consensus analyst estimates by 4 cents. GAPP and non-GAAP operating margin was 16% and 26.7%, respectively. Revenues climbed 3.6% to $2.6 billion, beating $2.51 consensus estimates. GMV rose 2% to $18.6 billion. The company returned $379 million to shareholders, including $250 million in stock buybacks and $129 million in cash dividends. The Board of Directors raised its dividend by 8% to 27 cents per share and authorized an additional $2 billion to its stock buyback program, bringing the remaining stock buyback authorization to $3.4 billion.
eBay Offers Strong Guidance
eBay forecasts Q1 2024 EPS of $1.19 to $1.23 versus $1.13 consensus analyst estimates. Revenues are expected to be between $2.50 billion and $2.54 billion versus the consensus estimates of $2.53 billion.
CEO Insights
eBay CEO Jamie lanonne noted that despite significant macro pressure on discretionary spending throughout its major markets, the company still drove organic GMV growth improvement, resulting in a 1% down year in 2023.
Focus category GMV rose 4%, outpacing its remaining business by 7 points. eBay exited 2023 with 30% penetration, stabilizing its active and enthusiast buyer count and improving its acquisition, reactivation and retention YoY improvement. eBay's first party advertising momentum, the launch of eBay International Shipping and financial services expansion led to generating 3% YoY organic growth to more than $10 billion.
Growing eBay's Automotive Business
The company introduced artificial intelligence (AI) powered auto parts recommendations based on vehicle mileage as part of its predictive auto maintenance to drive auto parts sales. Its parts and accessories established position led to over 100 million vehicles being saved in its My Garage section by active customers.
CEO lannone concluded, "We expect continued momentum in first-party advertising, despite lapping outstanding growth in the prior year, while we grow our financial service offerings for customers. And from a financial standpoint, we are in a strong position to expand margins, drive robust earnings growth and deliver healthy capital returns to shareholders in 2024, while still investing in high ROI initiatives to keep us on the path towards sustainable GMV growth."
eBay analyst ratings and price targets are at MarketBeat. eBay peers and competitor stocks can be found with the MarketBeat stock screener.
Daily Pennant Pattern
The daily candlestick chart for EBAY is a pennant pattern. The pennant formed after the flagpole base formed from a swing low at $40.61 on February 16, 2024. Shares rallied after gapping to $46.28 on Q4 2023 earnings and sharply rising to a peak at $52.82 on March 14, 2024. The descending upper trendline comprised of lower highs, and the ascending trendline comprised of higher lows meeting at the apex point formed the pennant, which is a symmetrical triangle forming at the top of a flagpole. The daily relative strength index (RSI) peaked at the 81-band and has fallen below the 70-band. The pennant will either result in a breakout as prices surge through the descending trendline or a breakdown if prices fall below the ascending trendline. Pullback support levels are at $49.82, $47.79, $46.28 and $44.55.
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