S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13

eBay Falls After Weak Guidance Saps Investor Sentiment

Friday, August 13, 2021 | Thomas Hughes
eBay Falls After Weak Guidance Saps Investor Sentiment

Move To The Sidelines When It Comes To eBay

eBay (NASDAQ: EBAY) reported a decent second quarter but shares fell anyway. Shares of eBay fell because the company missed its consensus estimates and confirmed one of the market's growing fears. eBay not only missed its consensus target but it also guided the third quarter and the second half of the year lower. With so much of the 2021 growth outlook pinned to the second half, the Delta variant spreading rapidly around the country, and companies like eBay guiding the market lower we might soon see the entire S&P 500 begin to correct and not just shares of eBay. Longer-term, the eBay story is still intact but, for now, it's time to sit on the sidelines and wait for a better time to own the stock.

eBay Misses The Mark For The Second Quarter

eBay had a good second quarter but one that missed the consensus estimates by a wide margin. The company reports $2.67 billion in net consolidated revenue for a gain of 14.1% over last year. The problem is that analysts had been expecting another 600 basis points of revenue growth. The growth was driven by a variety of factors including eBay's payment migration and advances in advertising revenue and should continue if at a lesser pace than previously expected.

Moving down the report, the company reported a decline in margins on both the adjusted and GAAP basis. The adjusted operating margin came in at 32.8% compared to 39% last year and cut deeply into the bottom line. On an adjusted basis, eBay earned $0.99 or $0.04 better than expected but still down from the calendar year 2020. On a GAAP basis, the earnings of $0.43 are less than 1/2 what eBay posted in the previous year and missed the consensus by $0.30.

Turning to the guidance, eBay is guiding third-quarter revenue in a range of $2.42 to $2.47 versus the $2.72 predicted by the analysts. The one mitigating factor is that the company is divesting itself of partial stakes in several business investments which is increasing cash reserves but also cutting into earning potential. As for earnings, the company is expecting $0.86 to $0.90 in adjusted EPS vs the $0.89 expected by the analyst.

The Analysts Are Iffy On eBay

The analyst consensus on eBay is neutral with a slightly bullish bias and that hasn't changed in the wake of the  Q2 report. Five analysts have come out with rating changes or price target changes in the wake of the report and only one has upgraded the stock, that from neutral to buy. The remaining four maintained neutral ratings but did increase their price targets. The consensus of these most recent 5 analysts is in the range of $70 to $75 or about 3% to 7% upside from current price action. This is consistent with the broad consensus but the new high is $85 set by Benchmark soon after the release.

The Technical Outlook: eBay Looks Range-Bound

Shares of eBay appear to be finding support in early action and have regained most if not all of the early losses. The caveat is that resistance appears to be present at the short-term moving average and that may cap gains in the near term.  Even if shares of eBay are able to get above the moving average and claw their way higher we see strong resistance near the $73level. Regardless, it is our opinion that eBay will be range-bound over the next few weeks or months and needs to regain market confidence before a rally can resume. 

eBay Falls After Weak Guidance Saps Investor Sentiment

Should you invest $1,000 in eBay right now?

Before you consider eBay, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and eBay wasn't on the list.

While eBay currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
eBay (EBAY)3.0$67.05-0.6%1.07%3.68Hold$76.67
Compare These Stocks  Add These Stocks to My Watchlist 


Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.