EBAY - Embedded Expectations Analysis - 2021 03 04
eBay Inc. (EBAY:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 14.9x Uniform P/E, implying bearish expectations for the firm. However, given management's confidence about managed payments, new customer trends, and business acceleration, market expectations are too bearish, suggesting equity upside is warrantedSpecifically, management is confident 38% of on-platform gross merchandise volume (GMV) was transacted using managed payments, they are committed to achieving a 30% margin, and sellers are seeing a 20% increase in eBay storefront visits. Also, they are confident they will continue to expand in-store experiences, they have extended assistance through their Up & Running program, and that their marketing, product, and managed payment progress is driving business acceleration. Furthermore, management is confident they are turning new customers into cross-category shoppers, the international business is accelerating sequentially, and small sellers make up 72% of the seller base on their platform
Given management's confidence about managed payments, new customer trends, and international business acceleration, market expectations are too bearish. As such, equity upside is warranted for EBAY
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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