eBay stock (NASDAQ: EBAY) has lost 9.1% in the last week, underperforming the S&P 500 (down 4.2%). Further, the same trend was observed over the last ten days (-8.5% vs -4.1%) and one month period (-12% vs -11%).
The company is known for operating the online marketplace eBay.com, where third-party buyers and sellers can transact in a variety of products. It witnessed strong growth in net revenues in 2020 and 2021 – rising 20% y-o-y and 17%, respectively. The rise was mainly because of a shift in customer behavior from offline to online due to the Covid-19 crisis. Further, it translated into a 192% increase in the stock from the March 2020 low of $28 to the all-time high of $81 in October 2021. However, the investor sentiment toward the stock has reversed since then. This was due to the lower-than-expected growth outlook of the company, which failed to impress the investors. The main reason behind it was the normalizing of customer buying behavior after the reopening of traditional retail stores and an expected drop in discretionary spending by customers due to macroeconomic concerns.
Although the firm topped the consensus estimates of revenues and earnings in recently released first-quarter results, its net revenues decreased 6% y-o-y to $2.5 billion. Further, the gross merchandise value (GMV), a key metric, fell by 20% to $19.4 billion. In addition to this, eBay provided revenue guidance of $2.35-$2.40 billion for the next quarter, which translates into a downfall of 7-9% on a year-on-year basis.
Now, is EBAY stock set to drop further, or could we expect some improvement? We believe that there is a 71% chance of a rise in eBay stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last ten years. See our analysis on eBay Stock Chance of Rise.
We estimate eBay‘s valuation to be around $61 per share which is 26% above the current market price.
Twenty-One Day: EBAY -12%, vs. S&P500 -11%; Underperformed market
(3% likelihood event; 71% probability of rise over next 21 days)
- eBay stock lost 12% over the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 11%
- A change of -12% or more over twenty-one trading days is a 3% likelihood event, which has occurred 72 times out of 2516 in the last ten years
- Of these 72 instances, the stock has seen a positive movement over the next twenty-one trading days on 51 occasions
- This points to a 71% probability for the stock rising over the next twenty-one trading days
Ten Day: EBAY -8.5%, vs. S&P500 -4.1%; Underperformed market
(5% likelihood event; 62% probability of rise over next 10 days)
- eBay stock decreased 8.5% over the last ten trading days (two weeks), compared to broader market (S&P500) loss of 4.1%
- A change of -8.5% or more over ten trading days is a 5% likelihood event, which has occurred 138 times out of 2516 in the last ten years
- Of these 138 instances, the stock has seen a positive movement over the next ten trading days on 85 occasions
- This points to a 62% probability for the stock rising over the next ten trading days
Five Day: EBAY -9.1%, vs. S&P500 -4.2%; Underperformed market
(2% likelihood event; 45% probability of rise over next five days)
- eBay stock lost 9.1% over a five-day trading period ending 05/10/2022, compared to the broader market (S&P500) decrease of 4.2%
- A change of -9.1% or more over five trading days (one week) is a 2% likelihood event, which has occurred 40 times out of 2516 in the last ten years
- Of these 40 instances, the stock has seen a positive movement over the next five trading days on 18 occasions
- This points to a 45% probability for the stock rising over the next five trading days
|S&P 500 Return||-2%||-15%||81%|
|Trefis Multi-Strategy Portfolio||-7%||-23%||205%|
 Month-to-date and year-to-date as of 5/11/2022
 Cumulative total returns since the end of 2016