Ebay Inc. (NASDAQ:EBAY) is a San Jose, California based American multinational Internet consumer-to-consumer corporation, containing more than 128 million active users around the globe. It is one of the world’s biggest online marketplaces, where almost anyone can buy and sell practically anything via any connected device. With more than 500 million items listed on its website, eBay connects a varied community of individual buyers and sellers, as well as many small businesses.
On April 29, eBay Inc (NASDAQ:EBAY) disclosed that it is obtaining a $3 billion tax charge to move $9 billion of its foreign proceeds into the United States. John Donahoe, eBay’s Chief Executive Officer, explains that the move “simply gives [them] greater financial flexibility.” Although eBay reported first-quarter profits above predictions, the tax charge and feeble perspective for the current quarter sent the company’s shares tumbling down.
As a result, there are rumors circulating that eBay is planning an acquisition. Robert Swan, eBay’s Chief Financial Officer, noted that “historically, [the company] has planned to use overseas profits for overseas purposes. What’s changed is the opportunities in the U.S.—while [eBay] ha[s] a strong balance sheet and [its] cash balance continues to grow—the opportunities in the U.S. are even bigger.”
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Shares of eBay Inc (NASDAQ:EBAY) opened at $51.95 on Wednesday, April 30. The company has a 1-year high of $59.70 and a 1-year low of $48.06. The stock’s daily moving average is $51.64 and has a 50-day moving average of $55.44. The market cap for eBay is $67.10 billion and its P/E ratio is 23.78.
Ebay released its latest quarterly earnings data on Tuesday April 29, where they reported $0.70 earnings per share. During the same quarter last year, the company posted $0.63 earnings per share. eBay Inc (NASDAQ:EBAY) had earnings of $4.26 billion for the quarter, compared to the consensus estimate of $4.23 billion. The corporation’s quarterly proceeds were up 13.7% on a year-over-year basis. On average, analysts predict that eBay will post $2.18 earnings per share for the current fiscal year.
On April 30, Morgan Stanley analyst Stephen Shin gave eBay Inc (NASDAQ:EBAY) a neutral rating and lowered his price target from $56 to $55. He explained “that higher spending and sluggish marketplace growth continue to overshadow PayPal’s solid performance.” Shin has a -12.2% average return over the S&P 500 and a 33% success rate according to TipRanks.
Separately, on April 30 Atlantics Equities analyst James Cordwell downgraded eBay’s stock to a neutral rating after the earnings report was released. He has a +21.9% average return over the S&P 500 and an 83% success rate.
However, not all analysts are recommending a neutral rating for eBay.
On April 28, just a few days before, RBC Capital analyst Mark Mahaney gave eBay an outperform rating with a $64 price target. He says he is “looking for consistent 42.5% segment margins and 12% year-on-year growth in U.S. GMV.” Mahaney has a +1.7% average return over the S&P 500 and a 49% success rate.
On April 30th Goldman Sachs analyst Heath Terry and Robert W. Baird analyst Ben Kallo also said BUY EBAY. Heath maintained a conviction BUY on the company and lowered his price target from $66 to $64, explaining that “while investments in marketing at PayPal and improvements in the Enterprise business could drive incremental growth, fee changes at StubHub will impact Marketplace revenue through 2014. With signs of growth acceleration, ~$4bn share repurchase in process, with room for more, and shares at 13x 2015 adjusted EPS estimates, we expect eBay Inc (NASDAQ:EBAY) to outperform its peers.” Terry has a +0.9% average return over the S&P 500 and a 47% success rate.
Ben Kallo reiterated his outperform rating with a $65 price target. He has a +14.2% average return over the S&P 500 and a 61% success rate.
EBAY currently has an analyst consensus of MODERATE BUY
Carly Forster writes articles on stock market news. She can be contacted at [email protected]