EBAY - Embedded Expectations Analysis - 2020 05 19
eBay Inc. (EBAY:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 14.8x Uniform P/E, implying bearish expectations for the firm. Although management's concerns about Marketplace gross merchandise volume, marketing spend, and revenue growth suggest the potential for near-term headwinds, market expectations remain far too bearish, suggesting longer-term outperformance is likely going forwardSpecifically, management may be concerned about the sustainability of expanded online shopping activity, and they may lack confidence in their ability to sustain Marketplace gross merchandise volume and continue to reduce marketing and promotional spend. Furthermore, they may be overstating the impact of their first-party inventory program expansion on revenue growth and their ability to save sellers money through their managed payments services, and they may have concerns about the reduced the number of Promoted Listings
Although management's concerns about Marketplace gross merchandise volume, marketing spend, and revenue growth suggest the potential for near-term headwinds, given the firm's strong economic moats and management execution, market expectations remain far too bearish, and longer-term equity outperformance for EBAY is warranted
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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