Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

eBay Earnings Report: Here’s What To Watch For

By MarketBeat.com (Nick Vasco )Stock MarketsJan 25, 2021 07:13AM ET
www.investing.com/analysis/ebay-earnings-report-heres-what-to-watch-for-200556935
eBay Earnings Report: Here’s What To Watch For
By MarketBeat.com (Nick Vasco )   |  Jan 25, 2021 07:13AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

After stalling out a few times in the second half of 2020, eBay (NASDAQ:EBAY) is looking like a 2021 winner. Shares are up more than 12% YTD and it hasn’t even been a month.

eBay is set to report its Q4 earnings on Thursday. A big upside surprise seems unlikely for Q4, but eBay looks primed for an outstanding Q1 2021… And it doesn’t appear that Wall Street has factored it in.

Stimulus Checks Are Tailwind for eBay

The $1,200 stimulus checks that were sent out last spring were a tailwind for a lot of businesses, but for some more than others. A company like Tesla (NASDAQ:TSLA) , for example, didn’t see demand surge when the checks started hitting Americans’ accounts. A $1,200 stimulus check is around 2% of the price of a Tesla, after all.

But there are countless things you could buy on eBay for $1,200. Or a lot less. On the Q3 earnings call, eBay management talked about the impact of the first round of checks. “Growth was at its peak in July and then moderated through August and September driven in part by the wind down of government stimulus payments even as residential mobility remained relatively constant.”

The trading card market, for example, caught fire over the summer of 2020. That was no coincidence.

With $600 stimulus checks getting sent to Americans this month, and $1,400 checks set to be approved any day now, eBay will have a nice tailwind in Q1 2021.

Wall Street Hasn’t Priced in the New Stimulus Checks

Over the last 30 days, eBay’s consensus price target has increased by just 4 cents a share. Thirty days ago, the second COVID-19 stimulus bill was sitting on then-President Trump’s desk and nobody knew if/when he would sign it.

As we sit here today:

  • Trump has signed the bill, putting the $600 checks in the mail.
  • Democrats won both of the Georgia Senate elections, giving the party complete control over the Presidency, House, and Senate.

If eBay raises its Q1 2021 guidance, the stock could get several upgrades in short order. The current consensus price target of $60.68 already gives eBay more than 7% upside from current levels. If it gets closer to $65, shares could react by quickly jumping a couple of points.

What Will eBay Say About South Korea Business?

eBay was in the news last Tuesday when the company said it is looking at strategic options for its South Korea e-commerce business – a fancy way of saying that eBay may sell the South Korea operations.

This isn’t the first time that eBay has floated the idea; a Seoul-based newspaper reported that eBay was looking to sell its South Korean unit in early March 2020. A deal never came to fruition, though the pandemic – which few predicted would have such a major impact at the time – may have had something to do with it.

With Coupang, a rival in the Korean e-commerce market, possibly nearing an IPO, eBay seems ready to exit Korea. eBay could take the Q4 call as an opportunity to talk about potential deals for its Korea business, which could net the company around $5 billion. The South Korea business makes up around 11% of eBay’s annual revenue, so this is an important decision for the company.

If eBay sells its South Korea business, it wouldn’t be the first large business that it has sold in the last 12 months. eBay sold StubHub in February 2020 for around $4 billion in cash. Five months later, the company sold its classified business to Adevinta for around $9.2 billion.

Under new CEO Jamie Iannone, eBay has prioritized its core business. On the Q2 call, he said that the Adevinta deal “allows us to dedicate our day-to-day focus on marketplace-to-marketplaces.” Iannone has identified several areas of improvement for eBay – these sales will only make it easier for him to deliver.

How Should You Play eBay?

Ebay Inc Stock Chart
Ebay Inc Stock Chart

eBay shares are nearing resistance in the high $50s ahead of Q4 earnings. Typically, that would make you want to stay on the sidelines.

Original Post

eBay Earnings Report: Here’s What To Watch For
 

Related Articles

eBay Earnings Report: Here’s What To Watch For

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email