eBay Earnings Preview: Looking For An In-Line Report

eBay Inc. EBAY is expected to report second quarter EPS Wednesday after the close. Analysts are expected the company to report EPS of $0.64, better than the $0.56 reported in the same period a year ago, while revenue is expected to rise to $3.89 billion from $3.4 billion a year ago. Deutsche Bank is more cautious heading into earnings here, as they note that growth should accelerate into the second half of the year.

Accelerating Marketplaces

Goldman Sachs reiterated a buy on the stock on last Thursday heading into earnings as they are bullish on accelerating marketplaces growth. "Contrary to management's guidance for slowing growth in 2Q, ChannelAdvisor reported 18.1% growth in SSS in 2Q, up from 15.4% in 1Q. Similarly, comScore reported reaccelerating visitor growth in 2Q to 4% versus c. 1% in 1Q, while mobile grew 138% yoy in 2Q. Our current forecast is for segment revenue of $2.03bn, up 11.8% yoy, vs. 1Q's 13.3%."

Goldman sees revenue at $3.9 billion, slightly better than consensus in the quarter, while they see EPS of $0.63, $0.01 below the average forecast. However, they are bullish on the stock and reiterate a buy rating and $63 price target. "We continue to believe that, at c.17x what we believe are our relatively conservative 2014 adjusted EPS estimates, eBay represents the most compelling risk/reward in our coverage."

Second Half Key