eBay Tanks 7.8% despite delivering strong quarterly results

Published by

July 25, 2024 2:51 PM

(GMT+2)

On Wednesday, e-Commerce giant eBay Inc. (NASDAQ:EBAY) reported better-than-expected fourth-quarter results. However, following the earnings, shares of the company plunged 7.8% to close at $50.35 in the extended trading session.

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The company reported an adjusted EPS of $1.05 with net revenue coming in at $2.61 in the quarter, up 5.4% year-over-year and in line with consensus estimates of $2.61 billion.

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"Rounding out a strong year, I'm proud of our team for delivering yet another solid quarter. By investing in our strategy to drive sustainable growth, we increased customer satisfaction, improved the seller and buyer experience, and returned value to our shareholders." - CEO Jamie Iannone, eBay.

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Gross merchandise volume (GMV) was down 10% from the previous year on an as-reported basis to $20.7 billion, while U.S. gross merchandise volume totaled $9.72 billion, down 2.5% year-over-year.

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The total of active buyers reported at 147 million in the quarter, missing consensus estimates of 155.5 million, and active sellers in the quarter totaled 17 million.

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The momentum eBay has seen during the pandemic when people abandoned stores for websites seems to have faded as shoppers return to in-browsing and buying. Chief Executive Officer Jamie Iannone maintains the company's advertising and payments businesses can boost profits even if total spending on the site falls.

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FY2022 OUTLOOK

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eBay expects to post revenues between $2.43 billion and $2.48 billion for the first quarter, below Street's estimates of $2.62 billion. The company further anticipates EPS in the range of $1.01 to $1.05 per share compared to the consensus estimate of $1.10 per share.

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EBay has been ridding pieces to appease activist investors discouraged by slow growth. In November, the company said it completed the sale of just more than 80% of its South Korean online marketplace to local retailer E-Mart Inc. for $3 billion.

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Yet, the Wall Street community is still cautiously optimistic about the stock with a Moderate Buy consensus rating based on 6 Buys and 5 Holds.

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Shares have declined 8.1% over the past year.

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