Amazon, eBay Shares Volatile Following ChannelAdvisor Data; How Impactful Is This Data Point?

  • Shares of Amazon.com, Inc. AMZN were lower by 2.21 percent late Thursday morning while shares of eBay Inc EBAY plummeted more than 7 percent.
  • ChannelAdvisor reported that Amazon’s September same-store sales slowed to 19.2 percent from 24.7 percent in August while eBay’s same-store-sales of 1.1 percent was well short of an estimated 15 percent.
  • The question investors and traders are asking is how impactful is ChannelAdvisor’s data.
  • Shares of Amazon lost more than 2 percent Thursday morning after ChannelAdvisor stated that the e-commerce giant saw its September same-store sales fall to 19.2 percent growth from 24.7 percent in August.

    The report also noted that eBay’s September same-store sales came in at 1.1 percent, a decrease from August’s 3.4 percent and “well below” ChannelAdvisor’s 15 percent projection.

    eBay’s stock plunged more than 7 percent as ChannelAdvisor added that September’s performance was among the worst seen since February 2011.

    Were Amazon’s Same-Store-Sales Declines Offset By Gains At AWS?

    ChannelAdvisor’s chart (seen below) shows that Amazon’s September 2014 same-store sales peaked at 37.9 percent while only three other readings since then have been above 30 percent. In addition, the most recent reading of 19.2 percent is the lowest level seen since last September.

    Related Link: William Blair Sees Long-Term Growth Potential In PayPal

    Amazon’s stock has surged around 60 percent since ChannelAdvisor reported the company’s September 2014 data.

    There is no doubt that Amazon’s stock has suffered some setbacks over the past year. However, the company was able to satisfy investor appetite for anything cloud-related with its AWS (Amazon Web Services) segment.

    Amazon announced in April 2015 that the AWS segment was profitable with sales of $1.57 billion and operating income of $265 million in the first quarter of the year. The company added that the segment remains on track to earn more than $1 billion in profit during the full fiscal year. According to Business Insider, this made Amazon “the biggest cloud computing infrastructure player of all.”

    Investors would naturally place a greater emphasis (and pay a higher premium) on the AWS segment given its outsized growth potential, rather than focus on monthly same-store sales metrics for the Amazon marketplace.

    eBay Can Longer Count On Paypal For Support

    eBay’s monthly same-store sales performance over the past year peaked at 9.8 percent in November 2014 and see-sawed between 5.1 percent in December 2014 and 7.2 percent in June 2015 before steadily declining to September’s 1.1 percent.

    Correlating eBay’s stock performance to its ChannelAdvisor’s readings may not yield any significant outcome. The company divested Paypal Holdings Inc PYPL into a separate company in July. Prior to the split, investors were valuing eBay’s stock as a sum of its parts, which consisted of eBay’s core marketplace platform and its e-commerce payment arm.

    During PayPal’s first day of trading as its own separate company, its market share eclipsed that of eBay’s. According to Fortune, PayPal’s market value rose to nearly $50 billion, while eBay’s valuation stood at $35 billion.

    Now that eBay’s stock consists of only its core platform, investors can better value the company based solely on the performance of its marketplace. September’s same-store sales marked the third consecutive month of declines, justifying Thursday’s heavy selling activity in the stock.

    Image Credit: Public Domain
    Posted In: Analyst ColorNewsPreviewsTechTrading IdeasAmazon AWSChannel AdvisorecommercePayPal split
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