eBay Stock Sinks After Q3 Earnings: 3 Analysts React To Soft International GMV

Shares of eBay Inc EBAY dropped 6.7% on Thursday after the company reported strong growth in key verticals but disappointed the market with soft international sales.

On Wednesday, eBay reported third-quarter adjusted EPS of 90 cents on revenue of $2.5 billion. Both numbers topped consensus analyst estimates of 89 cents and $2.46 billion, respectively. Revenue was up 11% from a year ago.

Related Link: Ford Analysts Break Down Q3 Earnings: 'Beat, Raise, Swagger'

U.S. gross merchandise volume was down 8% year-over-year but up 23% compared to 2019. International GMV was down 15% year-over-year and 14% quarter-over-quarter.

Annual active buyers dropped 5% to 154 million.

Looking ahead, eBay guided for fourth-quarter EPS of between 97 cents and $1.01 compared to analyst estimates of $1. The company also guided for fourth-quarter revenue of between $2.57 billion and $2.62 billion.

Voices From The Street: Credit Suisse analyst Stephen Ju said active buyer declines accelerated as eBay focuses more on retaining high-value users.

“Improvements across core initiatives were offset by macro/mobility headwinds, particularly to int’l GMV, which has lower exposure to focus verticals and higher exposure to cross-border,” Ju wrote.

KeyBanc analyst Edward Yruma says focus categories such as auto and advertising are building momentum.

“EBAY continues to make progress in key verticals, which we think will help drive LT growth,” Yruma wrote.

Raymond James analyst Aaron Kessler said trends in growth categories like sneakers, watches, handbags and trading cards are encouraging.

“While we remain positive on eBay’s improved execution, we believe tough GMV comps through 2Q22 will likely limit material upside from current levels and expect shares to remain range bound until we get through tougher comps,” Kessler wrote.

eBay Ratings, Price Targets:

  • Credit Suisse has an Outperform rating and raised the price target from $81 to $82. 
  • KeyBanc has an Overweight rating and raised the price target from $80 to $90.
  • Raymond James has a Market Perform rating.
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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsMoversTrading IdeasAaron KesslerCredit SuisseEdward YrumaKeyBancRaymond JamesStephen Ju
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