eBay Stock Slides on Soft Outlook
eBay stock is falling Thursday after the e-commerce company topped fourth-quarter expectations but issued a soft first-quarter outlook.
eBay (EBAY) stock is moving lower Thursday after the e-commerce company beat top- and bottom-line expectations for its fourth quarter but issued a mixed outlook for the current quarter.
In the three months ending December 31, eBay's revenue increased 0.7% year over year to $2.6 billion. Earnings per share (EPS) rose 16.8% from the year-ago period to $1.25.
"eBay delivered strong results in the fourth quarter, as we met or exceeded expectations across our key financial metrics," said Chief Financial Officer Steve Priest.
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eBay also said Gross Merchandise Volume (GMV) increased 4% year over year to $19.3 billion, which also beat analysts' expectations of $19.1 billion.
"We created a solid foundation to build upon in 2025," Priest added, "and our outlook reflects our confidence in eBay's ability to drive sustainable, long-term growth."
The results beat analysts' expectations. Wall Street was anticipating revenue of $2.57 billion and earnings of $1.20 per share, according to Investor's Business Daily.
For its first quarter, eBay said it expects to achieve revenue in the range of $2.52 billion to $2.56 billion, GMV in the range of $18.3 billion to $18.6 billion and earnings in the range of $1.32 to $1.36.
The midpoints of these ranges were mixed compared with analysts' expectations of revenue of $2.59 billion, GMV of $18.9 billion and earnings of $1.33 per share.
Is eBay stock a buy, sell or hold?
Following its 44.8% total return in 2024 and a 10%-plus run to start 2025, Wall Street is on the sidelines when it comes to the large-cap stock.
According to S&P Global Market Intelligence, the average analyst target price for EBAY is $61.94, which represents a discount of about 1% to current levels. Meanwhile, the consensus recommendation is Hold.
Financial services firm Needham reiterated its Buy rating and $72 price target on EBAY stock following the earnings release.
"EBAY is outperforming other marketplace peers in our coverage, posting the third consecutive quarter of positive GMV growth amid a tough macro backdrop, specifically in the UK and Germany, and management expects this growth trajectory to continue in '25E," says Needham analyst Bernie McTernan in a note this morning.
Mcternan cites 6% growth and "strong trends" in EBAY's core business, which continues "to be a strong driver for the company in their return to sustainable and profitable growth."
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