eBay Reports Mixed Q2 Results; Street Says Buy

Multinational company specializing in consumer-to-consumer and business-to-consumer sales through its website eBay Inc. (EBAY) has reported mixed results for the second quarter ended June 30, 2021.

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Following the earnings, shares of the company dropped marginally to close at $67.43 in Wednesday extended trade.

eBay reported quarterly revenues of $2.7 billion, up 14% from last year. The revenue figure, however, missed the consensus estimate of $3 billion. Revenues from Promoted Listings increased 14% to $224 million and aided the overall revenue growth.

The company reported earnings per share (EPS) of $0.99, unchanged from the prior year. However, the figure surpassed the Street’s estimates of $0.95.

In other operating metrics, the company’s gross merchandise volume stood at $22.1 billion, down 7% from the prior year. Annual active buyers saw a year-over-year decline of 2% to 159 million, while annual active sellers witnessed a growth of 5% to 19 million.

Meanwhile, the company anticipates revenues in the third quarter to be in the range of $2.42 billion to $2.47 billion against the Street’s estimates of $2.89 billion. While EPS expectations for the third quarter is between $0.86 and $0.90, the consensus for the same is pegged at $0.90.

The CEO of eBay, Jamie Iannone, said, “During the quarter, we hit several important milestones in our ongoing transformation, including the transition of eBay’s Classifieds business — a deal that has already delivered exceptional shareholder value — and the announcement of the sale of our Korean business. We are simplifying our portfolio and growing our core while delivering significant shareholder value.” (See eBay stock chart on TipRanks)

Prior to the earnings, Cowen & Co. analyst John Blackledge reiterated a Hold rating on the stock. The analyst, however, raised the price target from $65 to $72, which implies 5.9% upside potential.

The analyst’s price target reflects the company’s eventual sale of its Korea and classifieds businesses as well as the increase in its buyback from $2 billion to $5 billion.

Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average eBay price target of $75.20 implies upside potential of 10.6% from current levels.

eBay scores a 7 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock will perform in line with market expectations. Shares have gained 22.6% over the past year.