What To Expect From eBay’s Q4 Results

January 25th, 2019 by Trefis Team
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EBAY
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eBay (NASDAQ:EBAY) is likely to report a strong Q4 on the back of a strong holiday season spending when it reports on January 29. While the company’s GMV may surprise on the upside, management commentary around strategically leveraging its current assets and relationship with PayPal is likely to garner much of investors’ attention.

We currently have a price estimate of $37 per share for eBay, which is around 20% higher than the current market price. Our interactive dashboard on eBay’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation.

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What We Will Be Watching

During the Q3 earnings call, eBay’s management highlighted that some of the company’s marketing initiatives were likely to take more time to bear fruit than was originally envisioned by management. While on one hand, the realignment of inventory incentives, coupon pricing and channel spend could dampen 2018, the lower base of 2018 and the boost from these measures is likely to make 2019 much more spectacular.

The company’s management also noted that as eBay continues to balance the messaging between newer and existing customers, the company believes that while the evolution could take longer for the existing user base, eBay wants to ensure that the overall base continues to register a healthy growth. The growth in user base has also been impacting GMV growth. However, eBay believes that the end of the exclusivity agreement with PayPal in 2020 will allow eBay to offer other payment options, something that has held back GMV growth despite the company’s marketing efforts.

There has also been some chatter about the possibility of the company spinning off the StubHub and Classifieds business to unlock shareholder value. While eBay’s management remains open about the possibilities, the company sees the two assets adding value organically and does not currently view them as divestiture options.

Do not agree with our forecast? Create your own price forecast for eBay by changing the base inputs (blue dots) on our interactive dashboard.

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