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eBay stock plummet on weak holiday quarter outlook

Published 10/30/2024, 04:34 PM
Updated 10/31/2024, 06:22 AM
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EBAY
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eBay Inc (NASDAQ:EBAY) reported third-quarter earnings that slightly beat analyst expectations, but shares tumbled 10% in premarket trading Thursday due to disappointing guidance for the crucial holiday shopping season.

The e-commerce giant posted adjusted earnings per share (EPS) of $1.19, edging past the analyst estimate of $1.18. Revenue for the quarter came in at $2.6 billion, surpassing the consensus estimate of $2.55 billion and representing a 3% increase YoY on both an as-reported and FX-neutral basis.

However, eBay's outlook for the fourth quarter fell short of Wall Street projections. The company expects Q4 EPS between $1.17 and $1.22, below the consensus of $1.22. Revenue guidance of $2.53-2.59 billion also missed analysts' expectations of $2.649 billion.

The company bought back another $750 million during the period and has over $1 billion remaining on its authorization.

Despite the guidance miss, Barclays analysts believe "the overall story remains unchanged" for eBay. They note the stock looks cheap "and buybacks should provide investors with some margin of safety on this temporary stumble."

"We achieved another quarter of positive GMV growth and delivered strong results across our key metrics," said Jamie Iannone, Chief Executive Officer at eBay. "Our Focus Categories and geo-specific investments are driving momentum in the business, and we are leveraging the power of Al to create magical innovations for our customers."

Gross Merchandise Volume (GMV) for Q3 was $18.3 billion, up 2% on an as-reported basis and 1% on an FX-neutral basis compared to the same period last year.

The company's advertising business continued to show strength, with first-party advertising products generating $396 million in revenue, a 15% increase YoY.

Senad Karaahmetovic contributed to this report. 

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