eBay Inc (EBAY): This E-Commerce Stock Is Pressured By Europe

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In addition to e-commerce, Amazon.com, Inc. (NASDAQ:AMZN) is active in the cloud field with its Amazon Web Services. Amazon follows an aggressive pricing strategy while competing with the likes of Microsoft Corporation (NASDAQ:MSFT), Google Inc (NASDAQ:GOOG) and Rackspace. The company has recently cut the prices of dedicated instances on its EC2 cloud computing platform by up to 80%. The market seems to like such moves, but Amazon will soon be tested when it provides its quarterly report.

What’s next for eBay?

As the stock market is growing, investors are more focused on growth prospects than on valuation. eBay is trading at a 16.15 forward P/E, cheaper than Overstock.com, Inc. (NASDAQ:OSTK) and much cheaper than Amazon, but I think it will not help in the near term. Analysts’ mean target price for eBay is 64.08, which I consider overoptimistic.

eBay must find a way to show better dynamics on both Marketplaces and PayPal fronts. The company states that it expects modest revenue acceleration in the second half of the year. Modest is not the word that investors are demanding right now.

Bottom line

eBay Inc (NASDAQ:EBAY) is likely to continue trading in the range where it has been since the beginning of this year. The company lacks growth catalysts. At the same time, no disaster happened, so you can expect the stock to move back and forth. If you are interested in growth, turn your eyes to Overstock.com, Inc. (NASDAQ:OSTK) and Amazon. Both stocks are risky, so you will probably want to see a pullback to get a safer entry.

The article This E-Commerce Stock Is Pressured By Europe originally appeared on Fool.com and is written by Vladimir Zernov.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and eBay. The Motley Fool owns shares of Amazon.com and eBay. Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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