eBay Stock To Post Mixed Results In Q1

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Trefis
EBAY: eBay logo
EBAY
eBay

eBay (NASDAQ: EBAY) is scheduled to report its fiscal Q1 2023 results on Wednesday, April 26, 2023 (after market close). We expect the stock to post mixed results, with revenues beating the mark but earnings missing expectations. The company outperformed the consensus in the last quarter, despite a 4% y-o-y decline in the net revenues to $2.5 billion. The top line suffered due to a 9% drop in the active buyer base and a 12% decrease in the Gross Merchandise Volume (GMV). We expect the same trend to continue in Q1.

Our forecast indicates that eBay’s valuation is $48 per share, which is 9% above the current market price of around $44. Our interactive dashboard analysis on eBay’s Earnings Preview has more details. 

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(1) Revenues expected to top the consensus

eBay’s revenues declined 6% y-o-y to $9.8 billion in FY2022. The drop was because of the re-opening of offline stores and tough macroeconomic conditions, which led to a drop in website traffic. Notably, gross merchandise value (GMV) fell by 15% to $73.9 billion. We expect the first-quarter results to be on similar lines. Overall, eBay’s revenues are forecast to touch $9.89 billion in FY2023.

Trefis estimates eBay’s fiscal Q1 2023 net revenues to be around $2.51 billion, 1% above the $2.48 billion consensus estimate. 

(2) EPS to marginally miss the consensus estimates

eBay Q1 2023 adjusted earnings per share (EPS) is expected to be $1.05 per Trefis analysis, slightly below the consensus estimate of $1.07. The company’s profit before tax (PBT) decreased from $398 million to -$1.6 billion in FY 2022. It was primarily due to an increase in loss on equity investments & warrants and higher operating expenses. That said, the PBT improved in the last quarter (Q4 2022) from -$1.16 billion to $829 million. We expect the same trend to continue in Q1. Overall, the company is likely to report a revenue-per-share (RPS)) of $19.26 in FY2023. 

(3) Stock price estimate is 9% above the current market price

We arrive at eBay’s valuation, using a revenue per share (RPS) estimate of around $19.26 and a P/S multiple of just above 2x in fiscal 2023. This translates into a price of $48, which is 9% higher than the current market price. 

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 

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 -1% 6% 48%
 S&P 500 Return 1% 8% 85%
 Trefis Multi-Strategy Portfolio 1% 9% 244%

[1] Month-to-date and year-to-date as of 4/25/2023
[2] Cumulative total returns since the end of 2016

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