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eBay (EBAY) Gears Up for Q3 Earnings: What's in the Cards?
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eBay Inc. (EBAY - Free Report) is scheduled to report third-quarter 2018 earnings on Oct 30.
In second-quarter 2018, earnings of 53 cents per share surpassed the Zacks Consensus Estimate by 2 cents. Gross revenues of $2.64 billion jumped 9.1% year over year (up 6% on an Fx-neutral basis).
We expect eBay to perform well on the back of strength in its marketplaces active users and net transaction revenues.
Shares of eBay have lost 27.7% on a year-to-date basis against its industry's growth of 5%.
Marketplaces Active Buyers to Drive Growth
In the second quarter, eBay’s marketplaces active buyers increased 4% from the year-ago period, amounting to a total of 175 million. We expect significant additions in the to-be-reported quarter as well. The Zacks Consensus Estimate for this metric is currently pegged at 176 million.
eBay’s accelerated Artificial Intelligence (AI) efforts through personalization, image search technology and customer support are expected to strengthen the Marketplace platform.
Moreover, the company has been giving more data to its marketplace sellers including price and restocking guidance, as well as more insight into inventory such as demand signals for the right products, price, and timing.
Strong GMV Growth
In the second quarter, the Marketplace platform GMV grew 11% year over year on a reported basis and 7% on an FX-Neutral basis to $22.6 billion, aided by continual expansion of new user experiences. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at $22.07 billion.
StubHub contributed $1.1 billion of GMV, up 5% on a year-over-year basis. The Zacks Consensus Estimate for the quarter to be reported is pegged at $1.21 billion.
Total GMV of $23.6 million in the second quarter grew 10% year over year on a reported basis. The Zacks Consensus Estimate for the third quarter is pegged at $23.29 billion.
Core Platform Strength to Drive Net Transaction Revenues
In the second quarter, eBay's total net transaction revenues were $2.08 billion. The figure is expected to increase in the to-be-reported quarter, as eBay has been strengthening its core platform and improving user experience.
The company accelerated its efforts by building product catalogs on structured data, enhancing mobile platform, rolling out new browse-inspired shopping journeys, rejuvenating customer-to-customer (C2C) business and strengthening its brand.
The Zacks Consensus Estimate for net transaction revenues is currently pegged at $2.09 billion.
Overhangs Remain
Concerns remain in the form of increasing petition in the e-commerce from companies like Amazon and Wal-Mart, as well as deceleration of the e-commerce market both domestically and internationally.
eBay's increased investment toward overall platform technology and slower growth rate compared to peers are also overhangs. Moreover, its growth continues to suffer due to weak world economy. The company is heavily dependent on countries outside the United States for transaction and Internet sales. However, the United States is flourishing whereas emerging economies are slowing down.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
eBay currently has a ZacksRank #3 and an Earnings ESP of -0.97%, which does not indicate a likely positive surprise.
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported:
Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #1.
Advanced Micro Devices, Inc. (AMD - Free Report) has an Earnings ESP of +1.31% and holds a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
eBay (EBAY) Gears Up for Q3 Earnings: What's in the Cards?
eBay Inc. (EBAY - Free Report) is scheduled to report third-quarter 2018 earnings on Oct 30.
In second-quarter 2018, earnings of 53 cents per share surpassed the Zacks Consensus Estimate by 2 cents. Gross revenues of $2.64 billion jumped 9.1% year over year (up 6% on an Fx-neutral basis).
We expect eBay to perform well on the back of strength in its marketplaces active users and net transaction revenues.
Shares of eBay have lost 27.7% on a year-to-date basis against its industry's growth of 5%.
Marketplaces Active Buyers to Drive Growth
In the second quarter, eBay’s marketplaces active buyers increased 4% from the year-ago period, amounting to a total of 175 million. We expect significant additions in the to-be-reported quarter as well. The Zacks Consensus Estimate for this metric is currently pegged at 176 million.
eBay’s accelerated Artificial Intelligence (AI) efforts through personalization, image search technology and customer support are expected to strengthen the Marketplace platform.
Moreover, the company has been giving more data to its marketplace sellers including price and restocking guidance, as well as more insight into inventory such as demand signals for the right products, price, and timing.
Strong GMV Growth
In the second quarter, the Marketplace platform GMV grew 11% year over year on a reported basis and 7% on an FX-Neutral basis to $22.6 billion, aided by continual expansion of new user experiences. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at $22.07 billion.
StubHub contributed $1.1 billion of GMV, up 5% on a year-over-year basis. The Zacks Consensus Estimate for the quarter to be reported is pegged at $1.21 billion.
Total GMV of $23.6 million in the second quarter grew 10% year over year on a reported basis. The Zacks Consensus Estimate for the third quarter is pegged at $23.29 billion.
Core Platform Strength to Drive Net Transaction Revenues
In the second quarter, eBay's total net transaction revenues were $2.08 billion. The figure is expected to increase in the to-be-reported quarter, as eBay has been strengthening its core platform and improving user experience.
The company accelerated its efforts by building product catalogs on structured data, enhancing mobile platform, rolling out new browse-inspired shopping journeys, rejuvenating customer-to-customer (C2C) business and strengthening its brand.
The Zacks Consensus Estimate for net transaction revenues is currently pegged at $2.09 billion.
Overhangs Remain
Concerns remain in the form of increasing petition in the e-commerce from companies like Amazon and Wal-Mart, as well as deceleration of the e-commerce market both domestically and internationally.
eBay's increased investment toward overall platform technology and slower growth rate compared to peers are also overhangs. Moreover, its growth continues to suffer due to weak world economy. The company is heavily dependent on countries outside the United States for transaction and Internet sales. However, the United States is flourishing whereas emerging economies are slowing down.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
eBay currently has a ZacksRank #3 and an Earnings ESP of -0.97%, which does not indicate a likely positive surprise.
eBay Inc. Price and EPS Surprise
eBay Inc. Price and EPS Surprise | eBay Inc. Quote
Stocks With Favorable Combination
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported:
Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #1.
AMETEK, Inc. (AME - Free Report) has an Earnings ESP of +0.71% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Micro Devices, Inc. (AMD - Free Report) has an Earnings ESP of +1.31% and holds a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>