Buy or Sell eBay Inc (EBAY) Forward

Their big competitors

As well as offering electronic hardware Amazon is originating media content, a fertile area for growth for them. Their eighth pilot has been approved for Amazon Studios. Rival Netflix, Inc. (NASDAQ:NFLX) has also been creating content with the content is king theme rising in prominence among all the media companies. More appealing content would help drive Amazon Prime membership (12% profit margin) numbers.

Amazon’s web services, its cloud computing infrastructure program, is a little mentioned part of the package with services like rental of supercomputer time, especially valuable to research facilities.

Amazon is trading at a rich forward P/E of 73.61 and a PEG of 4.58. It’s trading close to 8% off its 52 week high of $284.72.

While anecdotal, customer service at Amazon is generally considered better at Amazon than eBay’s Marketplaces. This is one issue eBay has to address to keep the momentum going for any eBay Inc (NASDAQ:EBAY)/Goodwill project’s goodwill effect.

As for Visa, it trading at a much higher multiple than eBay and its own competitors American Express Company (NYSE:AXP), Mastercard, and Discover Financial Services at 46.60. Discover trades at only a 9.90 P/E and playing nice with eBay Inc (NASDAQ:EBAY) seems to be paying off for them.

In its favor Visa has zero debt, a 59.33% operating margin, and a small yield of .80%. Trading at 52 week highs and already up 49% over the last year there may be little upside left in the short term.

Attracting new eBay sellers

For eBay’s Marketplaces it all comes down to getting new sellers who can make money without a hassle. That has been the attraction of Fulfillment By Amazon; it appeals to the lazier among us.

In the Sell It Forward program prepaid mailers and an automatically generated tax-deductible receipts saves hours of work for sellers and should garner some great word of mouth. If executed well, sellers who may never have sold on eBay Inc (NASDAQ:EBAY) before could become long term customers.

Is it time to abandon the eBay cart?

These Sell It Forward and Buy It Now concepts could finally reverse the fortune of Marketplaces. Sloth and impatience are two sins they can exploit successfully.

A caution: eBay traded at a 16 P/E last November so wait for a pullback. But it’s still the value name among Amazon and Visa. So, yes, you can buy it forward with a clear conscience.

The article Buy or Sell eBay Forward originally appeared on Fool.com and is written by AnnaLisa Kraft.

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