E-commerce platform eBay (NASDAQ:EBAY) delivered better-than-anticipated results for the first quarter, driven by its efforts to revive sales. The company’s adjusted earnings per share (EPS) increased over 5% year-over-year to $1.11, surpassing analysts’ estimate of $1.07. Shares rose 2.6% in Wednesday’s extended trading session.
Improved Performance
Earnings growth was driven by higher revenue and a lower share count due to buybacks, partially offset by margin contraction. Revenue increased 1.1% to $2.51 billion and exceeded analysts’ estimate of $2.49 billion.
The company attributed its performance to strength in its “focus categories,” which include motor parts and accessories, luxury merchandise like watches, collectibles, and refurbished items.
eBay stated that refurbished gross merchandise volume (GMV) accelerated notably during the quarter and posted double-digit year-over growth. Further, Q1 top-line growth benefited from contributions from advertising.
However, eBay’s overall GMV fell 5% to $18.4 billion in the first quarter. Excluding currency headwinds, GMV declined 2%. Additionally, active buyers on the platform were down 7% year-over-year to 133 million.
Looking ahead, eBay expects its Q2 2023 revenue in the range of $2.47 to $2.54 billion, which reflects organic forex-neutral growth in the range of 1% to 4%. It projects Q2 adjusted EPS between $0.96 and $1.01. Analysts were expecting revenue of $2.49 billion and adjusted EPS of $0.99.
Is EBAY Stock a Buy, Hold, or Sell?
Overall, Wall Street is sidelined on eBay stock, with a Hold consensus rating based on six Buys, 10 Holds, and two Sells. The average price target of $48.65 suggests 12.2% upside. Shares have risen about 5% so far this year.
