eBay Could Get Some Holiday Cheer with Mobile Sales, $39 Fair Value
Despite retailers gunning for a lucrative Christmas shopping season, grim economic conditions in the U.S. and Europe have weighed on sentiment for e-commerce giants like eBay (NASDAQ:EBAY) and Amazon (NASDAQ:AMZN) as concerns over consumer spending persist. Sales this past Black Friday were up 6.6% vs. a year ago lifting the outlook for holiday spending. Online sites were a big winner netting around 40% of total sales and 10% were on mobile devices. [1] eBay continues to bolster its online shopping experience through a strategic acquisition of recommendation engine Hunch, as well as further enhancements to its mobile shopping segment that will benefit the site this holiday season.
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eBay Pitching to Consumers: Shop on Mobile
According eMarketer, e-commerce holiday sales in the U.S. are expected to grow by around 17% to $46.7 billion in 2011. [2] To add further perspective, this double-digit growth is coming despite the worrisome macro-economic scenario in the western world.
Source: eMarketer
Additionally, given the booming smartphone and tablet usage and their relative convenience, eBay is conducting a major pitch to consumers, encouraging them to increasingly shop through mobile. Recent product upgrades included the launch of the RedLaser 3.0 iPhone app, which allows for instant comparison shopping through bar-code scanning. [3] eBay also stands to gain in its payments segment, given that PayPal has invested heavily this year to improve its mobile payment capabilities through acquisitions such as Zong.
We currently have a price estimate of around $39 for eBay’s stock, which is about 35% above the current market price.
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