EBAY - Embedded Expectations Analysis - 2021 05 21
eBay Inc. (EBAY:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 15.4x Uniform P/E, implying bearish expectations for the firm. However, given management's confidence about GMV and revenue growth, their verticals, and their managed payments initiatives, market expectations are too bearish, suggesting equity upside is warrantedSpecifically, management is confident they saw 42% net revenue, 36% US gross merchandise volume (GMV), and 24% total GMV growth year-over-year. Moreover, they are confident they have made positive payments progress, their multiyear initiatives have increased platform monetization, and that U.K. Brand Outlet tests have been performing well. Also, management is confident they expect high-teen volume growth going forward, that they are investing in reinventing their vertical experience, and that they will launch more innovation for trading cards throughout the year. Furthermore, they are confident they can drive GMV growth through their verticals and as they scale their initiatives, and that they continue to keep customer needs at the forefront of their decisions
Given management's confidence about GMV and revenue growth, verticals initiatives, and their managed payments project, market expectations are too bearish. As such, equity upside 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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