Online e-commerce giant eBay (NASDAQ:EBAY) is one of the longest-running Internet success stories. Today, eBay stands as a true household brand name through a range of e-marketplaces that match buyers and sellers for everything under the sun.
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The company has been publicly traded since 1998, and 20 years later continues to be a cornerstone growth stock in many investors’ portfolios. eBay has annual revenues of $2.6 billion and counts more than 175 million buyers worldwide through its various platforms.
The eBay app has over 414 million downloads on mobile phones and tablets and generated $12.9 billion in mobile sales volume in the most recent quarter. Just in the last five years alone, a $10,000 investment would have gained 59.31 percent, bubbling to $15,931.
eBay: A peek into the company
eBay, Inc. was one of the earliest pioneers of the modern, commerce-based Internet, with roots that date back to 1995. Originally built to match buyers and sellers of used goods, the eBay platform grew exponentially to include a broad array of new products, from clothing and electronics to automotive parts and even automobiles themselves.
eBay recently added the StubHub brands for reselling sports and concert tickets, and eBay Classifieds is the largest online local marketplace helping buyers and sellers connect locally in over 1,500 cities around the globe.
A very brief history of eBay stock
eBay debuted on the NASDAQ in the fall of 1998, right at the onset of the first Internet revolution. If you had invested $10,000 in EBAY stock twenty years ago, that investment would now be worth $45,860,000 (as of 9/14/18) – a total return of roughly 4,586 percent. The same investment would have realized a five-year return of 59% and a 10-year return of 273%.
Meanwhile, over the last year, the stock has been down roughly 10%, potentially representing a buying opportunity. Over the last 12 months (ending 9/14/18), EBAY, which has a market capitalization of $34 billion, has traded in a range between $32.85 and $46.99. It’s worth remembering that eBay spun off PayPal (NASDAQ: PYPL) in 2015 into a separate company. Interestingly, Paypal’s stock is up 160% since then while eBay’s stock up only 30%.
Should you purchase eBay stock?
- eBay pioneered the concept of matching buyers and sellers via an online e-marketplace platform and continues to benefit from its widely-recognized brand, posting gross merchandise value (GMV) of $23.6 billion for the most recent quarter.
- The company has successfully expanded into B2C sales and is growing a robust third-party marketplace business.
- eBay is invested heavily in marketplace improvements, such as rolling out three-day guaranteed delivery, designed to make buying and selling on eBay even easier and drive greater sales volume.
- The ongoing battle with Amazon as well as niche players for online marketplace supremacy could make you uneasy if you’re an investor.
- This summer, eBay stock declined nearly 10% after quarterly results, after concerns the e-marketplace has not kept pace with competitors.
How to purchase EBAY
EBAY is widely traded and listed on the NASDAQ, and its stock is available for purchase through all major brokerage firms that trade in securities. Some basic ideas on how to acquire the stock are as follows:
1. Figure out the size of your investment.
Investing assumes that you expect your capital will increase in value, given enough time, with the full knowledge that it’s possible to lose capital as well. After researching and determining the risks associated with EBAY and weighing your own risk tolerance, decide on an appropriate amount of money to invest in the stock.
2. Find a suitable broker
If you’re unsure of the specific steps to purchase a stock, most brokerages offer phone and local office support and educational videos to demonstrate how to purchase shares. Don’t have a broker? Check out a few of our favorites from our Best Online Brokerage picks:
3. Purchase shares of EBAY
Once you’re set up with a broker, follow the instructions to enter a purchase order for the number of shares you wish to purchase based on the total dollars you wish to invest.
eBay stock’s future outlook
Analysts generally acknowledge that the company is uniquely positioned to square off against Amazon, Etsy, Wayfair, and others. Its reputation for providing a high-quality customer experience is steadily improving and the company is making significant investments to strengthen and improve its e-commerce platforms.
Time will ultimately tell whether eBay lives up to long-term expectations. Overall, EBAY stock appears to be a reasonable value, but buy and trade at your own risk.
eBay’s remarkable success has led many competitors to try to copy its model. The company dominated the U.S. market but has grown to become a global brand. However, with companies like Alibaba, Amazon, Rakuten and others growing in the marketplace, eBay has seen its once-premier spot in the marketplace begin to melt.
Keep an eye on how the company responds to competition over the coming years and whether that forces innovation or compressed margins.