What to Expect From eBay Earnings

The company is continuing improvements in the user experience, which is helping the company to keep pace with upstart rivals. eBay’s marketplaces keep attracting new users, evidenced by double-digit growth in active users and items sold. Many Wall Street analysts feel the company has a decided advantage in cross-border shipping of product, something that many other retailers struggle with.

While Wall Street remains focused on the PayPal spin-out scheduled for later this year, better-than-expected fourth-quarter results reinforced the positive view that the eBay is on target to unlock the value of its faster-growing PayPal business, and possibly its enterprise business.

In 2014, eBay decided to separate the PayPal and eBay units into two separate entities. An SEC filing from earlier in April shows more detail on the terms and conditions of this split-up. Make no mistake here, the companies are going to keep some efforts together. Still, the terms are being partially shown for what to expect in the years ahead.

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In the month before earnings, a few analysts made calls on eBay:

• B. Riley reiterated a Buy rating with a $66 price target, which implies upside of 16% from current prices.
• Piper Jaffray downgraded the company to Underweight and lowered its price target to $49 from $52, implying downside of around 13%.

So far on the year, eBay shares have been relatively flat, only up about 0.5%.

Shares of eBay rose 0.6% at $56.74 on Wednesday. The stock has a consensus analyst price target of $59.44 and a 52-week trading range of $46.34 to $60.93. eBay’s market cap is $68.7 billion.