The forecast indicates that eBay’s valuation is around $69 per share, which is 14% above the current market price of around $61.
1) Revenues expected to be ahead of consensus estimates in Q1
Trefis estimates eBay’s EBAY +0.2% fiscal Q1 2021 revenues to be around $2.99 billion, just above the $2.97 billion consensus estimate. eBay’s revenues of $10.3 billion for the full year 2020 were above its 2019 figure, as the shift toward online marketplaces became faster in the pandemic. We expect the momentum generated over last year to continue in the first quarter of FY2021. Overall, the expected revenue of around $12 billion in FY2021.
2) EPS likely to miss consensus estimates
eBay’s Q1 2021 earnings per share are expected to be $1.05 per Trefis analysis, just below the consensus estimate of $1.07. The company’s net income margin rose in 2020 as they completed the sale of StubHub to viagogo on February 13, 2020, for $4.1 billion in proceeds. This increased the EPS figure from $1.77 in 2019 to $3.54 in 2020. The removal of lockdowns and steady growth in the rate of vaccination has contributed to a revival in demand across sectors. Altogether, the company is likely to report an EPS of around $3.36 in FY2021.
3) Stock price estimate 14% above the current market price
Going by eBay’s valuation, with an EPS estimate of around $3.36 and a P/E multiple of 20.6x in fiscal 2021, translates into a price of $69, which is 14% above the current market price of around $61.
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