The slowdown in Europe has put pressure on eBay Inc (NASDAQ:EBAY). The e-commerce giant has recently issued earnings that came in-line with expectations, but provided a soft guidance. The shares were punished on the day of the report. This year has not been successful for eBay shareholders, as the stock is up only 2%. The stock has been trading in a tight range since the beginning of the year. Will this situation change?
eBay Inc (NASDAQ:EBAY) posted an enabled commerce volume growth of 21% compared to the same period of the previous year. If compared to the previous quarter, the growth was 3.7%, which might not look like an impressive figure. However, if we look at 2012, the second quarter enabled commerce volume grew only 1.8% compared to the first quarter of 2012. It was the fourth quarter, which is the strongest quarter for commerce that set up the real growth.
It’s worth noticing that revenue grew at lower rates, scoring a 14% growth compared to the same period of 2012. eBay Inc (NASDAQ:EBAY) stated that a large number of new customers are younger. In addition, they are from emerging countries. This is a way to say they have less money, hence the difference in growth rates.
eBay Inc (NASDAQ:EBAY) is blaming the macroeconomic situation. Because of this, the company has stated that it would likely to finish the year at the lower end of its guidance. Literally everyone is blaming Europe this earnings season. While reading through numerous earnings reports, I noticed that companies from different industries do not expect this situation to change in the near term. This means eBay Inc (NASDAQ:EBAY) could struggle with growth.
Areas of growth
Shareholders of Overstock.com, Inc. (NASDAQ:OSTK) cannot complain about the lack of growth. The stock is up 129% this year. The company has shown tremendous momentum on its latest earnings report. Revenue increased 22% compared to the same period a year ago. More importantly, net income rose a mind-blowing 687%. Gross margin improved by 177 basis points at 19.7%. No wonder that the stock was rallying.
One could argue that the shares, which are trading at 25 forward P/E, have gotten ahead of themselves. However, if we look at another player in the e-commerce field, Amazon.com, Inc. (NASDAQ:AMZN), which is trading at 96 time forward earnings, we can see that the market is ready to pay for growth prospects.
Amazon.com, Inc. (NASDAQ:AMZN) is having a decent year–its shares are up 22%. E-commerce optimizer ChannelAdvisor has recently reported that same-store sales for clients relying on Amazon rose 30.6% year-over-year in June. eBay Inc (NASDAQ:EBAY) clients have had 17.7% same-store growth. Amazon shares responded to that news.