EBAY - Embedded Expectations Analysis - 2020 03 11
eBay Inc. (EBAY:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.9x Uniform P/E, implying bearish expectations for the firm. However, given management's excitement about their capex guidance, and confidence about their investments and ad conversion, market expectations are likely overly bearish, justifying outperformance going forwardSpecifically, management generated an excitement marker when saying their free cash flow guidance of $2.2bn-$2.4bn assumes a capex in the 4%-6% range. In addition, they are confident they saw an improvement from lapping out IST, they expect the contribution of payments revenue to increase in H2 2020, and that GMV is not getting worse in states that instituted an internet sales tax. Moreover, they are confident their structured data initiatives have improved ad conversion, they focus on placing ads that lead to an accretive user experience, and that their sneaker promotions are a continuation of their practice of experimentation
eBay is a global commerce provider, which includes its Marketplace, StubHub and Classifieds platforms. The company's Marketplace platforms include its online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. The company's StubHub platforms include its online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. These platforms connect fans with their favorite sporting events, shows and artists and enable them to buy and sell tickets whenever and wherever they want. The company's Classifieds platforms include a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others.
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