On Thursday, Piper Sandler adjusted its outlook on eBay (NASDAQ:EBAY) shares, increasing the stock's price target to $67.00 from the previous $64.00, while maintaining an Overweight rating. The firm's perspective comes in light of eBay's current performance and future prospects.
eBay's Gross Merchandise Volume (GMV) has seen growth this quarter, a trend that is expected to continue positively into 2025. The company's commitment to shareholder returns is evident through its substantial repurchases, with $2.25 billion bought back year-to-date.
The management at eBay has also initiated a consumer-to-consumer (C2C) product venture in the United Kingdom. This move is projected to contribute positively to the company's revenue, particularly in the second half of 2025.
The increase in the GMV estimates following the recent earnings report has led Piper Sandler to raise the target price for eBay shares. The Overweight rating reaffirms the firm's positive stance on the stock's potential.
In other recent news, eBay Inc (NASDAQ:EBAY). reported strong Q3 financial results, with a focus on consumer-to-consumer (C2C) sales and artificial intelligence (AI) enhancements. The company's gross merchandise volume (GMV) rose over 1% to $18.3 billion, and revenue increased by more than 3% to $2.58 billion.
Non-GAAP operating income and earnings per share also grew, with the latter surging by 16% to $1.19. Barclays recently adjusted eBay's price target to $64, while maintaining an Overweight stance on the stock, following the company's earnings report.
The firm believes eBay's share repurchase program will offer protection to investors despite a fourth-quarter guidance that fell below consensus. In other developments, eBay introduced a new business model in the UK for C2C transactions, which accounts for less than 15% of the company's business.
eBay's Q4 projections anticipate a GMV between $18.9 billion and $19.3 billion, and revenue estimates ranging from $2.53 billion to $2.59 billion. Non-GAAP EPS for Q4 is expected to be between $1.17 and $1.22, indicating a year-over-year growth of 9% to 14%. The company also plans to raise its share repurchase target to $3 billion for 2024.
InvestingPro Insights
Adding to Piper Sandler's positive outlook on eBay, recent data from InvestingPro provides further context to the company's financial health and market performance. eBay's market capitalization stands at $30.63 billion, reflecting its significant presence in the e-commerce sector. The company's P/E ratio of 11.97 suggests that it may be undervalued relative to its earnings, aligning with Piper Sandler's optimistic price target.
InvestingPro Tips highlight eBay's financial strength and shareholder-friendly policies. The company has been aggressively buying back shares, which corroborates the article's mention of substantial repurchases totaling $2.25 billion year-to-date. Moreover, eBay has raised its dividend for 5 consecutive years, demonstrating a commitment to returning value to shareholders.
The company's impressive gross profit margins, currently at 72.03%, underscore its operational efficiency. This strong profitability metric supports eBay's ability to invest in new ventures, such as the C2C product in the UK mentioned in the article, while maintaining robust financial health.
For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips that could provide deeper insights into eBay's investment potential.
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