Earnings season is a crucial time for investors and analysts, as it provides insights into how well companies have performed over the past quarter and gives indications of their future earnings. In 2023, expectations for US Q1 earnings were low due to economic challenges and rising interest rates. Surprisingly, many companies beat these low expectations, with 75% of S&P 500 companies surpassing forecasts.
What can we expect from eBay?
2022-11-22 • Updated
What will happen?
eBay will report four-quarter Earnings Per Share and Revenue on February 23.
Why is it important?
eBay Inc. is one of the world’s largest online marketplaces, which connects buyers and sellers worldwide. Its marketplace platform allows users to search and buy products placed for sale or auction. The company has business operations across 190 countries.Now eBay is getting through a period of changes. During the pandemic, eBay had a boost in earnings because people bought more things online, during quarantine. Now the pandemic ends, and many companies are returning to their pre-COVID numbers.
What is the forecast?
Revenue and Earnings Per Share (EPS) are a key to the fundamental analysis of a company's worth. The Revenue and EPS Summary provides the Revenue, EPS and Dividends of a company by year and quarter for the past three years on a single page.
According to Zacks Investment Research, based on nine analysts' forecasts, the consensus EPS forecast for the quarter is $0.82. The reported EPS for the same quarter last year was $0.72.
As for revenue, previously, actual indicator was a little higher than expected, so the actual showed better results. This time it’s expected to be 2.61B, which is close to the actual numbers, as we can predict. Investors are optimistic about eBay's earnings announcement. The e-commerce giant has raised growth expectations in its previous two reports, most recently after an 11% increase in organic sales in the third quarter. Of course, sales volumes were down from their peak a year ago. However, eBay is making up for these drops with higher-order costs and growth in its payment and advertising segments.
What should traders know?
The company still sees significant opportunities for volume growth as trading moves online. Niches such as collectible sneakers, second-hand clothing, and luxury watches have bright growth prospects. But eBay will need to expand its buyer base to continue bringing more sellers to the platform (and avoid competitors like Walmart, Amazon, and Shopify).
While there should be some good news about eBay's profitability and cash flow this week, it's this buyer pool figure that will have the biggest impact on its growth rate over time.
After the previous release, however, the cost of eBay stock fell by 7%. Even though predictions were good, and the actual numbers came out higher than expected, the outlook for the future quarter was unattractive. Investors supposed that eBay can struggle with a decay, due to the reduction of the pandemic boost. Therefore, it led to the fall of the stock.
So, what can we expect now? Have a look at the chart! The resistance is at 60, and the support is at 55.
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