Reports Q2 2021 results on Wednesday 11 August after market close
Expected Revenue: $3 Billion
EPS forecast: $0.95
Judging by the stock market response, investors aren't seeing much excitement over eBay's (NASDAQ:) quarterly earnings release tomorrow after the close.
eBay Weekly Chart.
Shares of the internet retail platform are down about 11% since the market leader, Amazon (NASDAQ:), disappointed late last month and gave a worse-than-expected third-quarter outlook.
This shouldn't be a big surprise. After all, Amazon has been able to dominate the e-commerce space during the pandemic, as people stuck at home ran for sale through online shopping channels.
Amazon's chief financial officer, Brian Olsavsky, told analysts on the July 29 earnings call that more vacations and social gatherings are ahead, and that there will be "things that people were probably going to shy away from last year and that's all good." ."
California-based eBay suggested in April that spending on the site could decline as more people get vaccinated, businesses reopen and incentive schemes dry up. Slowing ecommerce sales also marks another challenge for the smaller ecommerce players like eBay: how many people will hold onto these platforms once the pandemic rush is over?
Business Consolidation
JMP analysts , which have the equivalent of a hold rating on the stock, wrote in a report that the various deals should help eBay focus on retaining customers and attracting sellers. eBay has consolidated its business for the past two years by selling assets and raising cash.
It sold StubHub, a secondary market for sports, music and live entertainment tickets, for more than $4 billion in 2019. It also agreed last year to sell its advertising business in a deal worth $2.5 billion. would yield in cash. In June, eBay said it was selling most of its South Korean business for about $3 billion.
In a statement, the company said:
"We believe these transactions create incremental strategic optionality for eBay as it invests and builds newer experiences around its core market, while maintaining its capital return strategy."
eBay Chief Executive Officer Jamie Iannone, who took over last year, focuses on advertising and payments to drive more revenue and counter the potential slowdown in the company's main online marketplace.
Gross trade volume, the value of all goods sold on the site, increased 29% to $27.5 billion in the first quarter, but growth in the second quarter is expected to slow to about 5% of 6.6% a year earlier, according to StreetAccount.
On the other hand, analysts don't see much gain in eBay stock after a 30% jump this year.
Chart: Investing.com
Of the 30 analysts surveyed by Investing.com, 18 have a neutral rating, while 12 have a buy call for the stock. Shares closed at $65.35 on Monday.
Starting point
eBay's core e-commerce business may show slower growth after a year of blistering sales as the economy reopens and people shift spending towards travel and dining out.
