Is eBay Stock 'Inexpensive'? Analysts Preview E-Commerce Giant's Q4 Earnings

E-commerce and auction company eBay Inc EBAY will report fourth-quarter financial results after market close Tuesday.

Here's a look at earnings estimates, what analysts are saying and key items to watch.

Earnings Estimates: Analysts expect eBay to report fourth-quarter revenue of $2.512 billion, according to data from Benzinga Pro.

The revenue estimate would come in flat to last year's fourth-quarter results and slightly ahead of third-quarter revenue of $2.50 billion. The company has beaten analysts' estimates for revenue in nine straight quarters.

Analysts expect eBay to report fourth-quarter earnings per share of $1.03, compared to $1.07 in the prior year period. The company has beaten analysts' estimates for earnings per share in 10 straight quarters.

Guidance for eBay’s fourth quarter is revenue of $2.47 billion to $2.53 billion and earnings per share of $1.00 to $1.05, as shared during its third-quarter financial results.

What Analysts Are Saying: Fourth-quarter results from eBay could come in higher than guidance, Needham analyst Anna Andreeva said.

The analyst, who had a Hold rating and no price target, said earnings per share would be more likely to be above estimates than revenue for the quarter.

"We model take rate at 13.8%, slightly < that of 3Q23 levels (holiday demand typically shifts more towards higher ASP items)," Andreeva said.

The analyst said advertising revenue for eBay is 2% of gross merchandise volume and has room to scale to the company's goal of $2 billion.

Andreeva saw eBay having margin expansion in 2024.

"The stock is inexpensive and likely defensive in this tape."

Andreeva said shares trade at around 7x enterprise value/EBITDA and at around 10x 2024 estimated earnings.

Here's a look at other recent analyst ratings for eBay:

BMO Capital Markets: Initiated with Market Perform rating, $49 price target

Wells Fargo: Maintained Equal-Weight rating, lowered price target from $46 to $45

Related Link: eBay To Pay $59M To Settle DOJ Inquiry On Alleged Violation Of Drug Laws In Marketplace

Key Items to Watch: One of the key items to watch for eBay could be costs and margins with recent news that the company will be laying off around 1,000 employees, or around 9% of its full-time employees.

"These are not actions we take lightly — and we recognize the impact they will have on all eBayers," the company said in January.

Analysts and investors will be anticipating 2024 guidance and a look at what's next for the company. eBay said it was committed to returning around 125% of its cumulative free cash flow to shareholders with share repurchases and dividends.

The auction company had several settlements announced in recent months, which could become a topic for where the company stands on any pending litigation and how the results could impact the company's financials.

EBAY Price Action: Shares of eBay trade at $43.80 versus a 52-week trading range of $37.17 to $49.48. Shares of eBay are down 3% over the last year.

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