eBay (NASDAQ: EBAY) stock has seen a strong YTD performance, gaining 26% compared to a 13% rise in the S&P 500 index. The company is set to report its fiscal Q2 2024 results on July 31, with expectations to exceed consensus estimates for revenues and earnings. In the previous quarter, eBay surpassed expectations with a 2% y-o-y increase in net revenues to $2.56 billion, driven by investments in focus categories and expansion of promoted listings, eBay International Shipping, and payment services. Gross merchandise value also grew by 1% y-o-y to $18.6 billion, a trend expected to continue in the second quarter.
Despite strong gains in 2021, eBay stock has seen inconsistent returns over the past few years, underperforming the S&P 500 in 2022 and 2023. With uncertainties such as high oil prices and elevated interest rates in the macroeconomic environment, there are questions about whether eBay will see a similar situation in the next 12 months or experience a strong jump. Trefis’ forecast indicates that eBay’s valuation is just below $53 per share, which is 3% below the current market price of around $54.
Revenue expectations for eBay in fiscal year 2024 forecast a 3% y-o-y growth to reach $10.28 billion, building on the 3% growth seen in FY2023. The increase in take rate and slight growth in gross merchandise value are expected to drive revenues in the second quarter. Trefis estimates eBay’s fiscal Q2 2024 net revenues to be around $2.54 billion, slightly above the consensus estimate of $2.53 billion.
In terms of earnings per share, eBay is expected to top estimates in Q2 2024, with an adjusted EPS of $1.14, slightly below the consensus estimate of $1.12. The company’s net income saw improvement in FY 2023, mainly due to a significant gain on equity investments. However, a loss on equity investments in Q1, offset by lower operating expenses as a % of revenues, led to a y-o-y reduction in net income. Improvement in the net income margin is expected in Q2, with a forecasted revenue-per-share of $20.40 in FY2024.
According to Trefis’ analysis, eBay’s stock price estimate is 3% below the current market price, based on a revenue-per-share estimate of around $20.40 and a P/S multiple of 2.6x in fiscal 2024. This translates to a price of $53, slightly lower than the current market price. Investors are advised to consider the potential performance of eBay stock based on these estimates and projections. Overall, eBay’s strong YTD performance and expectations for exceeding revenue and earnings estimates in the upcoming quarter indicate a positive outlook for the company.
