Can This Online Retailer Compete With Amazon?
Estimize | Jul 20, 2016 02:13AM ET
eBay Inc (NASDAQ:EBAY) Information Technology - Internet, Software and Services | Reports July 20, After Market Closes
Key Takeaways
- The Estimize consensus is looking for earnings per share of 43 cents on $2.17 billion in revenue, 1 cent below Wall Street on the bottom and right in line on the top
- eBay is one of the pioneers of ecommerce but is falling by the wayside to Amazon (NASDAQ:AMZN) and is now losing footing to Wal-Mart Stores Inc (NYSE:WMT)'s rapid online growth
- eBay has large exposure to Britain and Europe so the aftermath of Brexit, falling pound and euro, will have an adverse impact moving forward
- What are you expecting for eBay ?
Online auction house, eBay is scheduled to report Q2 earnings this Wednesday, after the market closes. eBay is one of the pioneers of ecommerce, but has been falling behind Amazon and is now losing footing to WalMart’s rapid online growth.
Meanwhile earnings are still struggling to rebound after the company spun off PayPal into its own publicly traded entity. As you might suspect, earnings have been lackluster lately, seeing a huge drop after PayPal went it own way in Q3 2015. Expectations remain relatively muted head into ebay’s second quarter report
The Estimize consensus is looking for earnings per share of 43 cents on $2.17 billion in revenue, 1 cent below Wall Street on the bottom and right in line on the top. Compared to a year earlier this represents a 44% decline in earnings and 51% fall in sales.
Fortunately the stock is a positive mover during earnings season. Shares typically make a 3% jump a month after earnings are announced.
Online auctions have lost their luster in recent years and no longer look like a viable business moving forward. eBay has taken notice and is slowly abandoning its core business in favor of more “buy it now” options. Given its current struggles to gain traction in the ever changing consumer environment, the Brexit won’t do them any favors.
Last quarter eBay pointed to strong performance in Germany and United Kingdom as a primary driver of revenue growth. With the pound and euro in a freefall over the past few days this should add to eBay’s woes.
Not counting PayPal Holdings Inc (NASDAQ:PYPL), ebay’s first quarter wasn’t that bad. Net revenue increased from $2.06 billion to $2.14 billion, reflecting a 4% jump between 2015 and 2016. Additionally, operating margins and cash flow from continuing operations saw a considerable jump. Still currency headwinds and stiffer competition are concerning for ebay moving forward.
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