UBS’ Bottom Quant Stocks In AI, IT, Healthcare & Others: 29 Stocks In All Sectors

6. eBay Inc. (NASDAQ:EBAY)

Number of Hedge Fund Investors In Q2 2024: 38

Sector: Consumer Cyclical

eBay Inc. (NASDAQ:EBAY) is one of the oldest eCommerce retailers in the industry. Like its peers, the firm depends on high volumes to maintain robust margins and earn a profit. While eBay Inc. (NASDAQ:EBAY) hasn’t grown to the scale of Amazon, the firm is currently undertaking a strategy to revitalize its marketplace. Through this, it aims to attract high spenders on its platform and then try to entice them to spend more by marketing other products. Additionally, eBay Inc. (NASDAQ:EBAY) is also expanding its consumer-to-consumer platform internationally, to provide it with the unique advantage of offering rare-to-find items. These factors will drive its narrative moving forward, and solid execution coupled with revenue and margin growth could lead to share price tailwinds.

eBay Inc. (NASDAQ:EBAY)’s management commented on these initiatives during the Q3 2024 earnings call. Here is what they said:

“One of the key building blocks underpinning our return to positive GMV growth has been our geo-specific investment, where we leverage our innovation playbook from focused categories to better serve customer needs at the local level. While many of these product experience changes benefit all sellers and buyers, we are particularly focused on consumer-to-consumer or C2C sellers for several reasons. C2C sellers bring some of the most unique inventory to eBay and are typically less price sensitive than B2C sellers. C2C sellers accelerate e-commerce as roughly 60% of their GMV comes from used and refurbished items compared to 40% for our marketplace overall.

Selling on eBay also creates a flywheel effect that stimulates incremental GMV as buyers who sell purchased roughly twice as much on eBay as non-sellers with most of their incremental spend supporting small businesses. As a reminder, our first major geo-specific initiative launched in Germany in March of 2023, and more than 18 months later, we continue to see significantly higher customer satisfaction or CSAT and improved GMV trends for the overall German market. This past April, we rolled out significant enhancements in the UK for pre-owned apparel categories. These improvements included simplified tools for selling and new tools to drive demand through enhanced discovery like Explore and Shop the look. Since then, we have observed material improvements to key C2C metrics like CSAT and active sellers alongside a double-digit improvement in C2C GMV growth in pre-owned apparel versus our prior baseline.”