By Dhirendra Tripathi
Investing.com – eBay (NASDAQ:EBAY) stock traded 3.6% higher Tuesday after Deutsche Bank (DE:DBKGn) initiated coverage with a ‘buy’ and a target of $145, more than 168% higher than its current level of $54.
According to StreetInsider analyst Lee Horowitz, the market is underappreciating eBay's positioning within secular growth trends. He finds the stock’s valuations compelling.
eBay’s fourth-quarter results had disappointed but weren’t a surprise either given that shoppers were bound to log off the site after two years of the pandemic to step out and shop.
Fourth-quarter gross merchandise volume, a key benchmark defining the total value of goods and services sold on an online platform, fell 10% to go below $21 billion. E-commerce firms’ revenue is derived from a percentage of GMV.
Annual active buyers on the platform also declined 9% to 147 million in the quarter.
The retailer is forecasting annual revenue of $10.4 billion and adjusted profit per share of $4.3 at the midpoint of its guidance range. GMV is seen between $78.3 billion and $80.5 billion, a guidance the analyst called “conservative”.
As the company’s core operations remain under pressure, CEO Jamie Iannone is banking on advertising and payments businesses to make up for it. The company's advertising offerings surpassed $1 billion in revenue for the year. With the complete transition of all sellers to a new payments platform, the company expects the shift to contribute to profits.
According to Horowitz, the market is also underappreciating the focus on execution that Iannone has brought to the company after taking over less than two years ago.