EBay "Thesis Not Changing" Analysts Say After Strong Guidance, Mixed Earnings

Zinger Key Points
  • JMP Securities Nicholas Jones sees some pressure for the company’s active buyers figure, which could be a trend to watch.
  • Credit Suisse's Stephen Ju mentioned a list of challenges facing eBay.

Analysts are sizing up the second-quarter financial report from marketplace and auction company eBay Inc EBAY, which reported results Wednesday after market close.

The eBay Analysts: Needham analyst Anna Andreeva had a Hold rating and no price target.

JMP Securities analyst Nicholas Jones had a Market Perform rating and no price target.

Mizuho Securities analyst James Lee had a Neutral rating and lowered the price target from $50 to $45.

Credit Suisse analyst Stephen Ju had an Outperform rating and lowered the price target from $60 to $59.

Barclays analyst Ross Sandler had an Overweight rating and a price target of $59.

Related Link: Ebay Q2 Earnings Highlights: Revenue And EPS Beat, Advertising Growth And New Deals Signed 

The Analyst Takeaways: Needham's Andreeva highlighted revenue growth for eBay as being under pressure.

The analyst said the company’s focus categories were outperforming the company’s total gross merchandise value. Advertising products from the company were also scaling.

“The GMS beat was driven more by U.S. as Europe is struggling with tougher macro/inflation; encouragingly, focus categories are outperforming total GMV internationally as well,” Andreeva said.

JMP Securities' Jones said the second-quarter results from eBay and the third-quarter guidance were “solid” as well.

The analyst saw some pressure for the company’s active buyers figure, which could be a trend to watch. Active buyers of 138 million in the second quarter were down year-over-year.

“While we are encouraged by tonight’s results and outlook, we do not view it as thesis changing,” Jones said.

Foreign exchange headwinds were a big focus for Mizuho Securities' Lee for the second quarter and the analyst said they appear to be “manageable.”

The analyst noted consumer spending for discretionary items could see near-term pressure in the short term.

“While we are encouraged by the focus on high-value buyers, we could be more constructive on the name as the company improves user experience in other focus categories such as electronics, home and garden, and fashion.”

Credit Suisse's Ju points to a list of challenges facing eBay: foreign exchange, macro, the war, inflation, supply chain challenges, shipping constraints and lower consumer confidence.

“That said vs. our estimates international GMV was better-than-feared while U.S. GMV came largely in-line,” Ju said.

The analyst saw focus categories, advertising growth and converting buyers into sellers as items to watch for the company in the future.

Barclays' Sandler remained Overweight on eBay after seeing the company report revenue and guidance above consensus in the backdrop of other e-commerce companies cutting their forward outlook.

“This print stands out, especially given eBay’s high concentration in Germany and the U.K.,” Sandler said.

The analyst saw eBay shares as a “good value in consumer internet.”

EBAY Price Action: Ebay shares were down 5.17% to $47.87 on Thursday at market close. After-hours shares were up 0.23% at $47.98.



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Posted In: Analyst ColorEarningsNewsPrice TargetAfter-Hours CenterAnalyst RatingsTrading IdeasAnna AndreevaauctionsBarclaysCredit Suisseecommerce stocksJames LeeJMP SecuritiesmizuhoNeedhamNicholas JonesRoss SandlerStephen Ju