Now trading at a price of $39.47, eBay has moved -1.7% so far today.
eBay returned losses of -11.0% last year, with its stock price reaching a high of $52.23 and a low of $37.17. Over the same period, the stock underperformed the S&P 500 index by -27.0%. As of April 2023, the company's 50-day average price was $41.75. eBay Inc. operates marketplace platforms that connect buyers and sellers in the United States and internationally. Based in San Jose, CA, the large-cap Consumer Discretionary company has 11,600 full time employees. eBay has offered a 2.4% dividend yield over the last 12 months.
Overview of the Company's Finances:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $8,650 | $7,429 | $8,894 | $10,420 | $9,795 | $9,940 |
| Gross Margins | 77% | 79% | 80% | 75% | 73% | 72% |
| Operating Margins | 31.0% | 30.0% | 38.0% | 28.0% | 24.0% | 22.0% |
| Net Margins | 28.0% | 24.0% | 64.0% | 131.0% | -13.0% | 14.0% |
| Net Income (MM) | $2,530 | $1,786 | $5,667 | $13,608 | -$1,269 | $1,342 |
| Earnings Per Share | $2.55 | $2.09 | $7.89 | $20.54 | -$2.27 | $2.33 |
| Diluted Shares (MM) | 991 | 856 | 718 | 663 | 558 | 493 |
| Free Cash Flow (MM) | $2,035 | $2,606 | $2,541 | $2,649 | $168 | $1,479 |
| Capital Expenditures (MM) | $623 | $508 | $463 | $444 | $2,459 | $1,388 |
| Net Current Assets (MM) | -$9,412 | -$10,598 | -$8,559 | -$7,737 | -$6,407 | -$5,971 |
| Long Term Debt (MM) | $7,685 | $6,738 | $7,740 | $7,727 | $7,721 | $7,721 |
| Net Debt / EBITDA | 1.72 | 2.18 | 1.69 | 2.24 | 2.36 | 2.36 |
eBay has weak revenue growth and increasing reinvestment in the business and wider gross margins than its peer group. Additionally, the company's financial statements display decent operating margins with a negative growth trend and healthy leverage. Furthermore, eBay has flat EPS growth and irregular cash flows.
A Very Low P/E Ratio but Trades Above Its Graham Number:
eBay has a trailing twelve month P/E ratio of 8.4, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $4.44, the company has a forward P/E ratio of 9.4. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -1.5%. On this basis, the company's PEG ratio is -5.62, which indicates that its shares are overpriced. Furthermore, eBay is likely overvalued compared to the book value of its equity, since its P/B ratio of 3.48 is higher than the sector average of 3.12. The company's shares are currently trading 66.4% above their Graham number.
eBay Has an Average Rating of Hold:
The 24 analysts following eBay have set target prices ranging from $32.0 to $56.0 per share, for an average of $45.34 with a hold rating. As of April 2023, the company is trading -7.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
eBay has an average amount of shares sold short because 3.5% of the company's shares are sold short. Institutions own 91.2% of the company's shares, and the insider ownership rate stands at 0.23%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $2,365,872,415.
