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eBay Long

by SignalFactory   ·  October 27, 2020 | 10:47:42 UTC  

eBay Long

by SignalFactory   ·  October 27, 2020 | 10:47:42 UTC  

eBay is set to report third-quarter 2020 results on Oct 28. In the last reported quarter, it delivered an earnings surprise of 2.9%.

For the third quarter, the Zacks Consensus Estimate for earnings has remained stable at 86 cents per share over the past 30 days. This indicates a growth of 28.4% from the year-ago reported figure.

The consensus mark for revenues is pegged at $2.68 billion, implying growth of 1.24% from the year-ago reported figure.

Factors to Note:

eBay’s solid performance of the Marketplace platform across all major end markets served is expected to have driven the top line in the to-be-reported quarter.

During the quarter, it rolled out more options for managed payment offerings to France, Italy, and Spain. This is expected to have bolstered the Marketplace platform.

As revealed during the second-quarter 2020 earnings release, managed payments offerings have processed $4.7 billion of gross merchandise volume (GMV) for around 42,000 sellers since its launch.

The latest move bodes well for the company’s growth initiatives toward strengthening the managed payments offerings portfolio and is expected to have helped it in attaining GMV growth. Also, this is in sync with eBay’s deepening focus on scaling managed payments globally.

Its verticals namely Home & Garden, Electronics, Fashion, Auto Parts, and Collectibles have been seeing strong demand. The increased demand is being driven by several factors like organic traffic, enhanced marketing, and higher conversions on its platform.

In addition, eBay’s sales are expected to have improved in the quarter to be reported owing to growth in online consumer spending due to broad-based and increasing social distancing.

Its accelerated Artificial Intelligence efforts through personalization, image search technology, and customer support are expected to have enhanced the Marketplace platform.

eBay has been providing more data to marketplace sellers, including price and restocking guidance, as well as more insight into inventory such as demand signals for the right products, price, and timing.

These factors are expected to have aided the top line in the to-be-reported quarter.

Core Platform Strength to Drive Net Transaction Revenues:

In a bid to increase total net transaction revenues, eBay has been strengthening its core platform and improving user experience.

eBay has been accelerating efforts to build product catalogs on structured data, enhance the mobile platform, roll out browse-inspired shopping journeys, rejuvenate a customer-to-customer business, and strengthen its brand. This is likely to have contributed to top-line growth in the third quarter.

Q3 Guidance:

For third-quarter 2020, eBay expects net revenues within $2.64-$2.71 billion. The Zacks Consensus Estimate for the same is pegged at $2.68 billion.

Non-GAAP earnings are anticipated in the range of 81-87 cents per share. Notably, the Zacks Consensus Estimate for the same is pegged at 86 cents per share.


Heightening Competition in the e-commerce market from companies like Amazon and multichannel retailers might have affected the company’s quarterly performance.

eBay’s increased investment in overall platform technology and a slower growth rate than peers might have hampered earnings.

eBay Long (Buy)

ENTER AT: 54.04

T.P_1: 54.98

T.P_2: 56.28

T.P_3: 59.04

S.L: 52.43

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