On Thursday, Evercore ISI adjusted its price target on eBay (NASDAQ:EBAY) shares, bringing it down to $47 from the previous target of $48. The firm has kept its "In Line" rating for the online marketplace.
The adjustment follows eBay's latest financial results, which showed a slight outperformance in revenue and non-GAAP EPS against Evercore ISI and Wall Street's expectations. The company's Gross Merchandise Volume (GMV) also surpassed projections by 1% and 2%, respectively, and non-GAAP EPS was 4% higher than anticipated.
The active buyer count remained flat year over year, aligning with market predictions. However, eBay's guidance for the second quarter raised concerns, as the forecasted revenue of $2.49 billion to $2.54 billion fell short of the expected $2.56 billion. The projected non-GAAP EPS of $1.10 to $1.15 was below the midpoint of street estimates.
Despite these short-term challenges, eBay's outlook for the full year remained unchanged, with expectations for GMV to turn positive in the second half of the year. The company anticipates revenue growth to modestly exceed GMV growth for the fiscal year 2024. eBay has also slightly increased its GAAP EPS guidance, now expecting a year-over-year growth of 9-11%, up from the previously forecasted 8-10%.
The company reaffirmed its commitment to improving operational efficiency, aiming for a 60-100 basis point expansion in non-GAAP operating margin. Moreover, eBay plans to continue its share repurchase program, with at least $2 billion in buybacks.
Despite the complex and challenging macroeconomic conditions, eBay's dedication to expense discipline and margin expansion, along with its efforts to innovate and introduce new products, were highlighted as positive factors by Evercore ISI.
InvestingPro Insights
As eBay navigates through a challenging economic landscape, its financial health and strategic decisions become pivotal data points for investors. According to InvestingPro data, eBay holds a market capitalization of $25.86 billion and an attractive P/E ratio of 10.03, suggesting that the stock may be undervalued compared to its earnings. Moreover, the company's gross profit margin for the last twelve months as of Q1 2024 stands at a robust 72.11%, indicating a strong ability to generate profit from its sales.
Key InvestingPro Tips highlight that eBay's management has been aggressively buying back shares and that the company has a notable track record of raising its dividend for 5 consecutive years, demonstrating a commitment to returning value to shareholders.
eBay's liquid assets surpass its short-term obligations, providing financial flexibility in uncertain times. For investors seeking more in-depth analysis, the full suite of tips on InvestingPro lists additional insights, including eBay's impressive gross profit margins and its status of trading near a 52-week high. To access these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The company's strategies and financial metrics, such as its share repurchase program and dividend growth, are essential considerations for investors analyzing eBay's potential for long-term value creation. With 11 more InvestingPro Tips available, investors can gain a comprehensive understanding of eBay's market position and future outlook.
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