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Is eBay a Buy Under $70?

Published 12/09/2021, 08:25 AM
Updated 12/09/2021, 09:31 AM
© Reuters.  Is eBay a Buy Under $70?
EBAY
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The shares of renowned e-commerce company eBay Inc. (NASDAQ:EBAY) have slumped 9% in price over the past month to close their last trading session at $67.16. The company has been focusing of late on strategic acquisitions and portfolio expansion. However, EBAY reported declining active buyers and value of goods sold in its most recent quarter due to shifting consumer preferences. So, is the stock a buy now? Keep reading to learn our view.Renowned multinational e-commerce company eBay Inc. (EBAY) in San Jose, Calif., operates marketplace platforms that connect buyers and sellers worldwide. The company gained substantially over the pandemic period because the closing of brick and mortar stores encouraged online shopping. However, that momentum is fading as people resume in-person shopping. EBAY posted a disappointing holiday sales outlook, with sales expected to be $2.57 billion - $2.62 billion in the period ending in December, versus analysts' $2.65 billion estimate. EBAY’s shares slipped on the news, which indicates declining active buyers on its online marketplace. Furthermore, the lean holiday outlook is partly due to inventory shortages and the global supply chain crunch.

Over the past month, EBAY’s stock has declined 9% in price to close its last trading session at $67.16. The stock is currently trading below its 50-day and 200-day moving averages. However, it has gained 34.6% over the past year and 33.7% year-to-date.

For the third quarter, ended September 30, EBAY reported better than expected financial results. The company's revenue increased 11% year-over-year to $2.50 billion, topping the $2.46 billion consensus estimate However, its gross merchandise volume, which is the value of all goods sold on the site, came in at $19.45 billion, representing a 10% decline year-over-year. Also, its annual active buyers stood at 154 million, down 5% from its year-ago period. The Street expects its revenue to decline 9.1% in the current quarter and 13.2% in the next quarter.

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