eBay Fair Value at $39 on Internet Retail Boom

With rising global Internet penetration as well as increase online retail activity, it comes as no surprise that we see an increasingly bright future for eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN). Internet retail is becoming more and more mainstream, so it’s not difficult to see why eBay’s stock may have some tailwinds, as traditional retailers are now starting to list their products on eBay’s website. These companies include U.K’s Saville Row, Ed Hardy and Jigsaw. The trend of retailers listing their merchandise on eBay will benefit the company by substantially increasing the amount of merchandise listings.

See Full Analysis for eBay Here

This year, we estimate that there will have been a total of 3.26 billion products listed on eBay. We expect this number to dramatically grow, reaching an approximate 3.48 billion in 2012, 3.71 billion in 2013,  3.96 billion in 2014 and extending up to 5.14 billion by the end of our forecast period.

The Past as the Best Indication of the Future

This predicted increase is not unlike what has already occurred in eBay’s lucrative past. Between 2007 and 2010, eBay saw the number of listings increase from 2.34 billion to 3.06 billion. This is further supported by the sheer increase in users that eBay has seen in the past. By the end of 2009, eBay had a total of 90 million active users. When compared to the 48 million users in 2004, it’s obvious to all that eBay has seen substantial growth. With these figures in mind, eBay is certainly looking like an interesting stock — definitely a company worth keeping an eye on.

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