EBay Delivers Better Than Expected Q1 Results, Guidance Disappoints
eBay Inc (NDAQ:EBAY)'s stock had its "sector weight" rating restated by equities researchers at Pacific Crest in a research report issued to clients and investors on Friday, StockTargetPrices.com reports.
EBay Inc has a 52 week low of $22.30 and a 52 week high of $34.74 with a P/E ratio of 5.33 The company's market cap is now $0.
Ebay Inc's outlook for the second quarter of 2017 was released its its earnings report for the first quarter of the year. Non-GAAP operating margin decreased to 30.0% in the first quarter of 2017, compared to 33.4% for the same period a year ago. During Q1, StubHub became the official ticket resale marketplace for the Los Angeles Angels and Toronto Blue Jays, offering pricing guidance for sellers and panoramic 360-degree virtual view-from-seats for buyers. Classifieds continued to enhance user experiences across its platforms, including launching a personalized homepage feed on Marktplaats.nl, as well as expanding its inventory integration with the eBay Marketplace platform across multiple regions. Its unique capabilities backed by technological improvements give it an edge over competitors such as Etsy (ETSY - Free Report), Alibaba (BABA - Free Report) and Facebook (FB - Free Report). Analysts had forecast eBay to earn 48 cents a share on $2.2 billion in revenue.
Underlying total eBay Inc. performance, the Marketplace platforms delivered $20.0B of GMV and $1.80B of revenue. Marketplace GMV was up 2% on an as-reported basis and 5% on an FX-Neutral basis, driven by growth of active buyers, continued expansion of new user experiences and brand advertising, which led to revenue growth of 2% on an as-reported basis and 5% on an FX-Neutral basis. On the other hand, StubHub also showed signs of accelerated growth with contribution of $916 million of GMV, up 6% on a year-over-year basis, and revenues of $210 million, up 18% year over year on a reported basis and 19% on an FX-Neutral basis. Classifieds had another quarter of strong growth delivering revenue of $199.0M, up 7% on an as-stated basis and 10% on an FX-Neutral basis with strength across its German platforms.
Pro-forma gross margin for the quarter was 77.1%, down 78 basis points (bps) year over year and 74 bps sequentially. Operating margin shrank 390 bps year over year and 196 bps sequentially to 25.3%. The e-commerce company reported $0.49 EPS for the quarter, beating the consensus estimate of $0.48 by $0.01. eBay had a return on equity of 24.13% and a net margin of 80.92%.
eBay's balance sheet is highly leveraged, with total debt of $9 billion eclipsing cash and short-term investments balance of $6.8 billion. Another cause for concern was the 7.5% y-o-y decline in free cash flows due to declining cash flows from operations.
In a pointed shot to Amazon, Wenig also touted the company's delivery prowess, noting that its customers enjoyed speedy shipping even before the launch this summer of expedited shipping for millions of products.
EBay shares fell by nearly 4 percent, to close at $32.53 after the company said late Wednesday that for its second quarter, it expects to earn between 43 cents and 45 cents a share, excluding one-time items, on revenue in a range of $2.28 billion to $2.32 billion. Non-GAAP earnings are expected within 43 cents-45 cents. This is an increase over its earnings per share of 47 cents from the same time a year ago.
Among the recent changes made in the way the firm functions, the key decisions taken by Devin Wenig, EBay's Chief Executive Officer, include redesigning the website's homepage so as to make it more personalized for visitors, up its expenditure on marketing, and making navigating through 1 billion listings much easier.
Currently, eBay carries a Zacks Rank #3 (Hold). Imagine being in the first wave of investors to jump on a company with nearly unlimited growth potential?
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