eBay is set to report its fiscal Q1 2024 results, with revenues expected to beat consensus estimates but earnings predicted to fall short. Despite a slight decrease in active buyers impacting the top line, the company saw a 2% increase in net revenues in the last quarter, driven by growth in first-party advertising product revenues and gross merchandise value. The trend of mixed results is likely to continue in Q1, as outlined in the interactive dashboard analysis on eBay’s Earnings Preview.
Over the past three years, eBay stock has shown little change, with returns of 32% in 2021, -38% in 2022, and 5% in 2023. In comparison, the S&P 500 saw returns of 27% in 2021, -19% in 2022, and 24% in 2023. Despite fluctuations in performance, eBay has underperformed the index over the last two years. The uncertain macroeconomic environment, including high oil prices and elevated interest rates, raises questions about eBay’s ability to outperform the S&P 500 in the next 12 months.
Trefis estimates eBay’s valuation at $49 per share, which is 5% below the current market price. The company’s revenues grew 3% to $10.1 billion in FY2023, driven by a higher take rate but offset by a drop in gross merchandise value. However, the GMV has shown signs of recovery in the last quarter, fueling expectations for continued momentum in Q1. With forecasted net revenues of $2.45 billion for fiscal Q1 2024, eBay is projected to outperform the consensus estimate.
In terms of earnings per share, eBay is expected to see a marginal miss on estimates, with adjusted EPS forecasted at $1.11 compared to the consensus estimate of $1.13 for Q1 2024. The company’s net income improved significantly in FY2023, primarily due to a jump in gains on equity investments and partially offset by higher operating expenses as a percentage of revenues. Overall, eBay is predicted to report a revenue per share of $20.26 in FY2024.
The stock price estimate for eBay is 5% below the current market price, based on a revenue per share estimate of $20.26 and a P/S multiple of 2.4x in fiscal 2024. This valuation suggests limited upside potential for eBay in the near term. As investors navigate the uncertain economic landscape, eBay’s performance in the coming quarters will be closely monitored to determine its ability to outperform the S&P 500 and deliver value to shareholders.