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The Right Time to Buy eBay Inc (EBAY)

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eBay Inc (NASDAQ:EBAY) fell by more than 6% after the company missed earnings estimates by a cent last week. The market usually overreacts to short-term news, especially on the negative side, and this seems to be the case with the online retail giant. In case you were waiting for a good entry point, this looks like the right time to press the buy button on eBay Inc (NASDAQ:EBAY)


The Numbers
The company reported a revenue growth of 14% for the last quarter, which translated into earnings per share growth of 12% year over year. The figure was a literally one cent below consensus estimates at $0.63 versus $0.64 expected on average by Wall Street analysts.
eBay Inc (NASDAQ:EBAY)´s guidance for the next quarter was also softer than expected, and that was another reason for disappointment.

But the company is doing well in several key strategic areas and positioning itself for growth over the next years. Management talked about weakness in Europe and currency headwinds as reasons for the uninspiring earnings guidance, but eBay Inc (NASDAQ:EBAY) still has ambitious targets for the middle term: the company expects to enable $300 billion in commerce volume by 2015, a considerable increase versus $175 billion in 2012.

PayPal continues performing strongly with a 20% increase in revenue. The payments platform finished the quarter with 132 million active accounts globally, adding 4.7 million new accounts during the period. Merchant services generated strong growth of 29% for the quarter and represented $30 billion of payment volume. PayPal’s net total payment volume grew 24% to $43 billion driven by consumer and merchant use of PayPal both on and off eBay.

Marketplaces saw revenue of $2 billion, increasing 10%, or 12% excluding the gain from the resolution of an indirect tax dispute in 2012. Marketplaces gained 3.5 million active users in the period and ended the quarter with 120 million, a 14% increase. Gross merchandise value grew 13% over the prior year on a global basis, and growth in the U.S. was a higher 16%.

Total commerce across all the company´s platforms was up 21% for the quarter,and eBay Inc (NASDAQ:EBAY) mobile attracted 3 million new customers in the quarter, a growth rate of 90% in its much important mobile business.

All in all, it’s hard to tell to what degree economic woes and currency translations can affect eBay Inc (NASDAQ:EBAY) over the next quarters. Maybe those hurdles are already incorporated into expectations, or perhaps things continue getting tougher on the economic front.

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