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eBay (NASDAQ: EBAY) Hasn’t Lost Momentum: RiverPark

eBay Inc (NASDAQ: EBAY) did not perform well on the share market during the second quarter of 2018 but still RiverPark Large Growth Fund is optimistic about the retailing giant. In its Q2’18 investor letter, the fund discussed eBay whose shares declined 10% for the second quarter. The fund believes that eBay has “a unique opportunity to reaccelerate its growth.” Let’s take a look at RiverPark’s comments about the company.

Despite strong first quarter results, EBAY shares declined 10% for the quarter as the company’s forward guidance disappointed some investors. For the first quarter, eBay reported solid results with 12% revenue growth, a 27.9% operating margin and 9% Non-GAAP EPS growth, all in-line with guidance. While the company also maintained its guidance for 2018, investors were disappointed that merchandise volumes (which have accelerated over the past few quarters) and margin growth are not expected to be more robust in the quarters to come.

We do not believe that eBay’s businesses have lost momentum and attribute the lack of a guidance raise to management’s conservativism. We continue to believe that eBay has a unique opportunity to reaccelerate its growth as its management is executing well on a range of initiatives to drive merchandise volumes as well as operating margins higher in the years to come.

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Shares of eBay Inc (NASDAQ: EBAY) are down 13.93% so far this year. Over the past three months, the stock has dropped 11.63%. Meanwhile, over the past 12 months, the company’s share price has fallen 13.45%. EBAY – which was closed at $32.76 on Tuesday – has a consensus average target price of $43.95 and a consensus average recommendation of ‘OVERWEIGHT’, according to analysts polled by FactSet Research.

When we look at our database, eBay isn’t a very popular stock among hedge funds covered by Insider Monkey. As of the end of the second quarter of 2018, there were 45 funds in our database with positions in the company, versus 53 funds at the end of the second quarter.

Meanwhile, don’t miss RiverPark’s comments about Adidas AGNorthrop GrummanDollar TreeEOG ResourcesCarMaxAlign Technology, and Amazon.com.

Disclosure: none

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