EBay And TrueCar Collaborate For New Car Buying Service

eBay Inc.’s (NASDAQ:EBAY) eBay Motors sealed a partnership with online automotive information and communications platform TrueCar (NASDAQ:TRUE) to provide a new car buying service.

The partnership will give eBay shoppers access to TrueCar’s pricing information and Certified Dealers network.

According to eBay’s Vice President of North America Merchandising, Hard Goods, “Together with TrueCar, eBay shoppers will gain deep insights on new car prices, further enhancing their automotive shopping journey.”

eBay to Boost Classifieds

eBay is currently replatforming itself by building product catalogs on structured data, enhancing mobile platform, rolling out new browse inspired shopping journeys, rejuvenating customer-to-customer (C2C) business and strengthening its brand.

eBay Inc. Revenue (TTM)

With the new move, eBay Motor is putting its newly improved homepage, which enables shoppers to search for auto parts, new or used vehicles, daily deals, and engage with the eBay Garage Community and blog, to some serious work. Shoppers can now access TrueCar’s website directly from eBay Motors’ enhanced homepage.

We believe that with the move, eBay is trying to boost its Classifieds platforms that includes Motors.

We note that over the last one year, the stock has underperformed the Zacks Internet - Commerce industry. It gained 43.7% compared with the industry’s gain of 42.6%. We expect replatforming and brand enhancement initiatives to lead to an upside.

TrueCar to Gain Strength on the Dealer Front

The new move can be seen as a step to boost TrueCar’s transaction revenues that consist of fees paid by dealers participating in the TrueCar Certified Dealers network.

Dealers pay this fee either on a per vehicle basis for sales to TrueCar’s platform users or as subscription fees.

TrueCar’s inclusion in eBay’s platform will help attract more dealers to the network and improve revenues.

Zacks Rank

Currently, eBay has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader technology sector include Monolithic Power Systems, Inc. (NASDAQ:MPWR) and Marchex, Inc. (NASDAQ:MCHX) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term expected earnings per share growth rates for Marchex and Monolithic Power are 15% and 17%, respectively.

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