Will eBay’s Stock Rise After Results?

by Trefis Team
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eBay (NASDAQ: EBAY) is scheduled to report its fiscal Q1 2021 results on Wednesday, April 28. We expect EBAY to beat the consensus estimates for revenues but fall short on earnings. The company has reported better than expected revenue and earnings figures in each of the last four quarters. In the past year the company saw growth due to the pandemic as people turned toward online marketplaces to fulfill their needs. We expect this shift towards online marketplaces to drive the first-quarter FY2021 results as well.

Our forecast indicates that eBay’s valuation  is around $69 per share, which is 14% above the current market price of around $61. Look at our interactive dashboard analysis on eBay’s Pre-earnings: What To Expect in Q1? for more details. 

(1) Revenues expected to be ahead of consensus estimates in Q1

Trefis estimates eBay’s fiscal Q1 2021 revenues to be around $2.99 billion, just above the $2.97 billion consensus estimate. eBay’s revenues of $10.3 billion for the full year 2020 was above its 2019 figure, as the shift toward online marketplaces became faster in the pandemic. We expect the momentum generated over last year to continue in the first quarter of FY2021. Overall, we expect revenue of around $12 billion in FY2021. Our dashboard on eBay’s revenues offers more details on the company’s segments.

(2) EPS likely to miss consensus estimates

eBay’s Q1 2021 earnings per share (EPS) is expected to be $1.05 per Trefis analysis, just below the consensus estimate of $1.07. The company’s net income margin rose in 2020 as they completed the sale of StubHub to viagogo on February 13, 2020, for $4.1 billion in proceeds. This increased the EPS figure from $1.77 in 2019 to $3.54 in 2020. The removal of lockdowns and steady growth in the rate of vaccination has contributed to a revival in demand across sectors. Altogether, the company is likely to report an EPS of around $3.36 in FY2021.

(3) Stock price estimate 14% above the current market price

Going by our eBay’s valuation, with an EPS estimate of around $3.36 and a P/E multiple of 20.6x in fiscal 2021, translates into a price of $69, which is 14% above the current market price of around $61.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year

Looking for reasonably valued software stocks with big room to grow? Check out our theme on Mid-Cap SaaS Stocks.

See all Trefis Price Estimates and Download Trefis Data here

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