eBay Stock Has Limited Upside

-9.79%
Downside
54.15
Market
48.85
Trefis
EBAY: eBay logo
EBAY
eBay

eBay’s stock (NASDAQ: EBAY) has gained roughly 7% YTD, which is at par with the rise in the S&P500 index. However, at its current price of $44, the stock is trading 7% below its fair value of $48 – Trefis’ estimate for eBay’s valuationThe company posted better-than-expected results in the fourth quarter of 2022, despite a 4% y-o-y drop in total revenues to $2.5 billion. The top line mainly suffered due to a decrease in the active buyer base, down 9% y-o-y to 134 million. Further, the Gross Merchandise Volume (GMV) reduced by 12% y-o-y in the quarter. Overall, the net income was $671 million in Q4, as compared to the $893 million loss in the year-ago period. It mainly benefited from a positive change in the fair value of equity investments.

The top line fell by 6% y-o-y to $9.8 billion in FY2022. Further, the GMV was down 15% y-o-y to $73.9 billion. Notably, the revenues suffered in 2022 due to the re-opening of offline stores and tough macroeconomic conditions, which led to a decrease in website traffic and lower GMV. On the expense front, total expenses as a % of revenues increased from 72% to 76% in the year. Further, the gain (loss) on equity investments changed from -$2.4 billion to -$3.8 billion. It resulted in a profit before tax (PBT) of -$1.6 billion vs $398 million in 2021. 

Moving forward, consensus estimates for Q1 2023 revenues and earnings are $2.48 billion and $1.07 respectively. Altogether, eBay’s revenues are forecast to remain around $9.9 billion in FY2023. Further, the firm’s revenue per share (RPS) is likely to increase from $17.55 to $19.26 in the year. This coupled with a P/S multiple of just below 2.5x will lead to a valuation of $48.

Relevant Articles
  1. Up 17% YTD, What To Expect From eBay Q1 Results?
  2. Up 19% YTD, Where Is eBay Stock Headed?
  3. Trailing The S&P By 20% This Year, Can eBay Stock Rebound?
  4. Down 4% YTD, What Should You Expect From eBay Stock?
  5. eBay Stock Is Down 7% YTD, What’s Next?
  6. What To Expect From eBay Stock?

Check out how eBay Peers fare on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 EBAY Return 0% 7% 49%
 S&P 500 Return 0% 7% 83%
 Trefis Multi-Strategy Portfolio -1% 7% 236%

[1] Month-to-date and year-to-date as of 4/5/2023
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates