Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Right Time to Buy eBay Inc (EBAY)

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.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.