eBay Earnings Preview: Double-Digit Revenue Growth Expected

eBay

is scheduled to report fourth-quarter 2011 results tomorrow, January 18, after the markets close. CEO John Donahoe said at the Consumer Electronics Show that mobile commerce is expected to be surge this year, with PayPal payments increasing as much as 75%. Investors could use more good news, considering eBay's per-share earnings have been relatively flat in the past three quarters and the share price has not moved much lately. Analysts are looking for the company to report that its per-share earnings rose to $0.57 for the quarter and that revenue totaled $3.3 billion. That is up from $0.52 per share on $2.5 billion in the same period of last year. Note that the EPS estimate is the same as it was 60 days ago, and eBay's per-share earnings have not fallen short of consensus estimates in the past ten quarters. For the full year, the consensus estimate calls for $2.00 per share earnings, an increase of 13.5% from the previous year. That EPS estimate also is unchanged over the past 60 days. And eBay's revenues are expected to have increased 22.6% year over year to $11.6 billion.

This San Jose, Calif.-based company is a provider of online marketplaces and online payment solutions to individuals and businesses globally. Its businesses include StubHub, Shopping.com, Rent.com, Half.com, eBay Classifieds, PayPal and Bill Me Later. The company was founded in 1995 and now is an S&P 500 component with a market cap of $39.5 billion. During the three months that ended in December, the company acquired Hunch.com and BillSAFE. It also launched X.commerce, an open commerce ecosystem, and mobile app RedLaser 3.0, a comparison shopping tool. And, eBay UK launched its first-ever pop-up shop in London's fashionable West End.

eBay has a long-term earnings per share growth forecast of 12.8%. Its P/E ratio of 22.3 is in line with the industry average, and its operating margin is much better than the industry average. Short interest is only 1.1% of the float. Nineteen of 33 analysts who follow the stock rate it a Buy or Strong Buy. Their mean price target on shares is 20.1% higher than the current share price. The share price of $30.62 is about the same as a month ago, as well as down more than 6% from six months ago. The 200-day moving average has offered resistance since November, and the 52-week range is $26.86 and $35.35. Over the past six months, the stock has underperformed Yahoo!

and the broader markets.

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