A strong performer from today's afternoon trading session is eBay, whose shares rose 2.3% to $82.77 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
a Very Low P/E Ratio but Its Shares Are Expensive:
eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 27.31 and an average price to book (P/B) ratio of 1.94. In contrast, eBay has a trailing 12 month P/E ratio of 18.4 and a P/B ratio of 7.96.
eBay has moved 24.3% over the last year compared to 11.4% for the S&P 500 — a difference of 12.9%. eBay has a 52 week high of $101.15 and a 52 week low of $58.71.
EPS Growth Achieved Primarily Through Stock Repurchases:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $7,429 | $8,894 | $10,420 | $9,795 | $10,112 | $10,283 |
| Gross Margins | 79% | 80% | 75% | 73% | 72% | 72% |
| Net Margins | 24.0% | 64.0% | n/a | -13.0% | 27.0% | 19.0% |
| Net Income (M) | $1,786 | $5,667 | $13,608 | -$1,269 | $2,767 | $1,975 |
| Net Interest Expense (M) | $311 | $304 | $269 | $235 | $195 | $264 |
| Depreciation & Amort. (M) | $600 | $583 | $502 | $442 | $403 | $324 |
| Diluted Shares (M) | 812 | 697 | 606 | 558 | 533 | 501 |
| Earnings Per Share | $2.09 | $7.89 | $20.54 | -$2.27 | $5.19 | $3.94 |
| EPS Growth | n/a | 277.51% | 160.33% | -111.05% | 328.63% | -24.08% |
| Avg. Price | $34.9 | $43.78 | $63.74 | $51.71 | $43.62 | $82.44 |
| P/E Ratio | 16.62 | 5.49 | 3.05 | -22.78 | 8.36 | 20.66 |
| Free Cash Flow (M) | $2,606 | $1,956 | $2,213 | $1,805 | $1,970 | $1,956 |
| CAPEX (M) | $508 | $463 | $444 | $449 | $456 | $458 |
| EV / EBITDA | 16.37 | 12.89 | 14.91 | 13.29 | 12.44 | 18.05 |
| Total Debt (M) | $7,758 | $7,746 | $9,082 | $8,871 | $7,723 | $7,425 |
| Net Debt / EBITDA | 2.89 | 2.06 | 2.25 | 2.41 | 2.45 | 1.89 |
| Current Ratio | 1.16 | 1.8 | 1.97 | 2.18 | 2.44 | 1.24 |
eBay has growing revenues and a flat capital expenditure trend, wider gross margins than its peer group, and healthy leverage levels. However, the firm has good EPS growth resulting mainly from stock repurchases. Finally, we note that eBay has positive cash flows and just enough current assets to cover current liabilities, as shown by its current ratio of 1.24.
