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EBAY Gains 34.3% YTD: Should You Buy, Hold or Sell the Stock?
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eBay (EBAY - Free Report) has gained 34.1% year to date, outperforming the industry’s return of 10.6%. It has also outpaced the Zacks Retail-Wholesale sector’s rally of 11.3% and the S&P 500 index’s increase of 17.2%.
The company has been benefiting from strength in its e-commerce business model. Growing momentum in its online marketplace, which engages numerous sellers and buyers, is a positive.
Increasing demand for eBay’s refurbished products and strength across its collectible offerings are acting as tailwinds.
Growth initiatives based on enhancing the seller and buyer experiences on its platform are expected to drive EBAY stock’s momentum further.
Efforts to Enhance User Experience Drive Prospects
According to a Mordor Intelligence report, the global e-commerce market size is expected to hit $8.8 trillion in 2024 and reach $18.8 trillion by 2029, witnessing a CAGR of 15.8% between 2024 and 2029.
eBay is well-poised to capitalize on growth prospects present in the booming e-commerce market on the back of growing user engagement on its online retail platform.
To boost user engagement, it is leaving no stone unturned to deliver enhanced user experience through design changes, improved navigation and more personalized features.
Its growing investments in Generative AI and machine learning are streamlining buying and selling experiences. This makes eBay’s marketplace more efficient for customers and improving their experience throughout their shopping journey.
The company recently rolled out generative AI-powered background enhancements for iOS and Android users in the United States, the U.K. and Germany. This new feature allows sellers to place their products against a variety of stunning backdrops effortlessly. This move has attracted overwhelmingly positive feedback from customers.
The company’s collaboration with Microsoft to integrate Azure cloud-computing software and open AI application programming interface into its core listing flow is a plus.
EBAY’s photo-to-listing AI tool is driving its momentum across marketplace sellers. The tool can create a product listing by automatically generating a title, description and information like product release date, category, subcategory, list price and shipping cost from a single photo.
eBay's increased focus on enhancing the Global Customer Experience (GCX) capabilities with AI has been a positive aspect. The launch of North Star has been improving customer interactions by summarizing incoming communications. This way, it helps eBay to understand customers' needs better, allowing it to provide quicker and more accurate support.
Apart from AI focus, eBay introduced PayPal’s (PYPL - Free Report) Venmo as a new payment option on its platform. The former is likely to gain solid traction among Gen Z and Millennial categories of customers with Venmo — which delivers a seamless and secured checkout experience. This strategic move is pivotal in expanding eBay’s customer reach.
To improve the shopping experience further, EBAY introduced optimized vertical browsing pages for fashion and new AI-driven features like Shop the Look and Explore. These features offer personalization and filtering options for buyers, contributing significantly to growth in the user base.
EBAY's introduction of a simplified selling process, curated item specifics, photo guidance, intelligent pricing suggestions and streamlined shipping options is noteworthy.
Conclusion
eBay’s growing efforts to bolster its online marketplace and strong prospects in the promising e-commerce market are expected to benefit its financial performance in the near term.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $2.55 billion, indicating growth of 1.8% year over year.
The consensus mark for third-quarter 2024 earnings is pegged at $1.17 per share, indicating growth of 13.6% year over year. The estimate has moved north by 3.5% in the past 30 days.
However, macroeconomic uncertainties and sluggish consumer discretionary spending remain concerns.
Also, rising competitive pressure from the e-commerce giant - Amazon (AMZN - Free Report) and Shopify (SHOP - Free Report) , which are also making concerted efforts to offer AI-powered enhanced shopping experiences on their platforms, pose a risk to its market position.
eBay is witnessing weakening momentum among active buyers. In the second quarter of 2024, its active buyer base stood at 132 million, which remained flat on a year-over-year basis.
Moreover, EBAY is trading at a premium with forward 12-month Price/Sales of 2.7X compared with the industry’s 1.73X, reflecting a stretched valuation at present.
Given the bright prospects of the company, existing shareholders should maintain their positions while new investors should wait for a more favorable entry point.
Image: Bigstock
EBAY Gains 34.3% YTD: Should You Buy, Hold or Sell the Stock?
eBay (EBAY - Free Report) has gained 34.1% year to date, outperforming the industry’s return of 10.6%. It has also outpaced the Zacks Retail-Wholesale sector’s rally of 11.3% and the S&P 500 index’s increase of 17.2%.
The company has been benefiting from strength in its e-commerce business model. Growing momentum in its online marketplace, which engages numerous sellers and buyers, is a positive.
Increasing demand for eBay’s refurbished products and strength across its collectible offerings are acting as tailwinds.
Growth initiatives based on enhancing the seller and buyer experiences on its platform are expected to drive EBAY stock’s momentum further.
eBay Inc. Price and Consensus
eBay Inc. price-consensus-chart | eBay Inc. Quote
Efforts to Enhance User Experience Drive Prospects
According to a Mordor Intelligence report, the global e-commerce market size is expected to hit $8.8 trillion in 2024 and reach $18.8 trillion by 2029, witnessing a CAGR of 15.8% between 2024 and 2029.
eBay is well-poised to capitalize on growth prospects present in the booming e-commerce market on the back of growing user engagement on its online retail platform.
To boost user engagement, it is leaving no stone unturned to deliver enhanced user experience through design changes, improved navigation and more personalized features.
Its growing investments in Generative AI and machine learning are streamlining buying and selling experiences. This makes eBay’s marketplace more efficient for customers and improving their experience throughout their shopping journey.
The company recently rolled out generative AI-powered background enhancements for iOS and Android users in the United States, the U.K. and Germany. This new feature allows sellers to place their products against a variety of stunning backdrops effortlessly. This move has attracted overwhelmingly positive feedback from customers.
The company’s collaboration with Microsoft to integrate Azure cloud-computing software and open AI application programming interface into its core listing flow is a plus.
EBAY’s photo-to-listing AI tool is driving its momentum across marketplace sellers. The tool can create a product listing by automatically generating a title, description and information like product release date, category, subcategory, list price and shipping cost from a single photo.
eBay's increased focus on enhancing the Global Customer Experience (GCX) capabilities with AI has been a positive aspect. The launch of North Star has been improving customer interactions by summarizing incoming communications. This way, it helps eBay to understand customers' needs better, allowing it to provide quicker and more accurate support.
Apart from AI focus, eBay introduced PayPal’s (PYPL - Free Report) Venmo as a new payment option on its platform. The former is likely to gain solid traction among Gen Z and Millennial categories of customers with Venmo — which delivers a seamless and secured checkout experience. This strategic move is pivotal in expanding eBay’s customer reach.
To improve the shopping experience further, EBAY introduced optimized vertical browsing pages for fashion and new AI-driven features like Shop the Look and Explore. These features offer personalization and filtering options for buyers, contributing significantly to growth in the user base.
EBAY's introduction of a simplified selling process, curated item specifics, photo guidance, intelligent pricing suggestions and streamlined shipping options is noteworthy.
Conclusion
eBay’s growing efforts to bolster its online marketplace and strong prospects in the promising e-commerce market are expected to benefit its financial performance in the near term.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $2.55 billion, indicating growth of 1.8% year over year.
The consensus mark for third-quarter 2024 earnings is pegged at $1.17 per share, indicating growth of 13.6% year over year. The estimate has moved north by 3.5% in the past 30 days.
However, macroeconomic uncertainties and sluggish consumer discretionary spending remain concerns.
Also, rising competitive pressure from the e-commerce giant - Amazon (AMZN - Free Report) and Shopify (SHOP - Free Report) , which are also making concerted efforts to offer AI-powered enhanced shopping experiences on their platforms, pose a risk to its market position.
eBay is witnessing weakening momentum among active buyers. In the second quarter of 2024, its active buyer base stood at 132 million, which remained flat on a year-over-year basis.
Moreover, EBAY is trading at a premium with forward 12-month Price/Sales of 2.7X compared with the industry’s 1.73X, reflecting a stretched valuation at present.
Given the bright prospects of the company, existing shareholders should maintain their positions while new investors should wait for a more favorable entry point.
eBay currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.