eBay (EBAY) Last Update 5/25/22
Related: GOOG AMZN AKAM VRSN
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
eBay
STOCK PRICE
DIVISION
% of STOCK PRICE
Net Debt
1.5% $0.94
TOTAL
100%
$62.26
$61.33
Yours
Trefis Price
N/A
$49.44
Market
 
Top Drivers for Period
Key Drivers
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TREFIS Analysis


Trefis Report
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

eBay Company

VALUATION HIGHLIGHTS

  1. Transaction Revenues constitute 94% of the Trefis price estimate for eBay's stock.

WHAT HAS CHANGED?

Latest Earnings

For FY 2021 Revenue was $10.4 billion, up 17% y-o-y and 15% on a FX-Neutral basis. Gross Merchandise Volume was $87.4 billion, -flat on reported basis and down 3% on a FX-Neutral basis. GAAP and Non-GAAP operating margin were 28.1% and 33.4%, respectively. Annual active buyers declined by 9%, for a total of 147 million globally. Annual active sellers declined by 8%, for a total of 17 million globally.

In Q1 2022, the company posted net revenues of $2.5 billion - down 6% y-o-y. It was due to a decline in website traffic, as compared to the previous year figure. Further, the gross merchandise value (GMV) was down 20% y-o-y in the quarter.

Impact of Coronavirus

IT software and Services industries are suffering from a fall in demand for software and web services as consumers are focusing solely on essentials and not discretionary products. That said, the industry has seen companies with a portfolio of software as well as services aimed at remote collaboration benefit due to the growing number of people globally. Many companies are also operating with employees working remotely from their own home. Online marketplaces gained more traction due lockdown and restrictions in various regions leading to eBay gaining buyers.

eBay Marketplaces

  • eBay Transaction Revenues: We currently forecast the transaction revenues to grow at a CAGR of around 2% through the end of our forecast period, driven by increasing number of users and a gradually improving take rate (note: take rate is eBay's commission on items sold).

  • eBay EBITDA Margin: We currently forecast eBay EBITDA margin to grow to around 40% by the end of our forecast period.

For additional details, select a driver above or select a division from the interactive Trefis split for eBay at the top of the page.

BUSINESS SUMMARY

eBay is known for operating the online marketplace eBay.com. The company's marketplace is where third-party buyers and sellers can transact in a variety of products including clothing, electronics, media, collectibles, automobiles and many other types of merchandise.

The payment services arm PayPal was spun off from eBay in 2015. eBay also divested its Enterprise business for a deal valued at $900 million in 2015. Accordingly we have excluded both these businesses in our valuation model.

KEY TRENDS

Growth In Global E-Commerce Volume

The global e-commerce market is growing at healthy rates owing to growing popularity of online shopping. According to eMarketer, the global retail e-commerce market is expected to grew from $1.3 trillion in 2014 to reach $4 by 2020. In the event, eBay is able to overcome its challenges, it could benefit from this high demand in the market. However, owing to increased competition from Amazon, Alibaba and traditional retail giants, we expect eBay to under-perform the broader e-commerce market in the coming years.

Focus on Increasing Conversion Rate

Conversion rate is a key focus area for eBay, as it seeks to increase the success of sellers in converting listed items to sold items. eBay has implemented a number of features to increase the conversion rate on marketplaces and continues to improve customer experience on its marketplaces. eBay has also complemented these features with search engine optimization (SEO) changes and broadening its marketing channels to include social platforms.