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On Thursday, CFRA analysts reiterated their Buy rating for eBay (NASDAQ:EBAY) shares, maintaining a price target of $76.00. According to InvestingPro analysis, eBay demonstrates strong financial health with an overall score of "GOOD," supporting the positive analyst outlook. The affirmation of the stock’s target follows eBay’s recent financial performance, which included a fourth-quarter earnings per share (EPS) of $1.25, marking a 16% year-over-year increase and surpassing expectations by $0.05. Despite this, eBay’s revenue for the quarter was $2,579 million, a modest 1% increase year-over-year, and fell $3 million short of the consensus estimate. The company’s current P/E ratio of 16.29 suggests reasonable valuation metrics, and InvestingPro analysis indicates the stock may be undervalued at current levels.
The analysts noted that the slight revenue miss was attributable to a lower take rate of 13.3%, compared to 13.8% in the previous year. This decline was primarily due to the elimination of consumer-to-consumer (C2C) seller fees in the United Kingdom (TADAWUL:4280) in October. However, CFRA anticipates an improvement in the take rate in 2025, fueled by the introduction of buyer protection fees in the U.K. and the expansion of managed shipping services. InvestingPro data reveals eBay maintains impressive gross profit margins of 72.02%, suggesting strong operational efficiency despite the take rate challenges. For deeper insights into eBay’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
eBay’s guidance for the first quarter was somewhat below consensus, reflecting a softer macroeconomic environment, particularly in the U.K. and Germany. The forecast also accounts for risks associated with tariffs and potential changes to the de minimis rule, which affects import duties.
Despite these challenges, CFRA maintains a positive outlook on eBay, highlighting the company’s strong performance in key focus areas such as parts and accessories, collectibles, and luxury fashion. The analysts also pointed to the potential for gross merchandise value (GMV) growth from eBay’s new listings on Facebook (NASDAQ:META) Marketplace and the acquisition of Caramel, an online platform for vehicle transactions, as additional reasons for their Buy rating. InvestingPro analysis shows the company has achieved a remarkable 58.78% price return over the past year, with multiple additional ProTips highlighting eBay’s financial strength and market position available to subscribers.
In other recent news, eBay reported strong fourth-quarter earnings that exceeded expectations, driven by robust holiday sales. Despite this, the company’s first-quarter guidance fell short of analyst projections, leading to mixed reactions from financial analysts. Benchmark analyst Daniel Kurnos raised eBay’s price target to $75 while maintaining a Buy rating, citing the company’s ability to meet or exceed key performance indicators. Stifel, however, lowered its price target to $63, expressing concerns about international market challenges and the company’s conservative guidance. BMO Capital Markets increased its price target to $63, acknowledging eBay’s effective execution in certain categories but remaining cautious about tariff impacts.
Citi analysts maintained a Buy rating with an $80 price target, highlighting eBay’s product innovation and strategic partnerships as positive factors for future growth. Meanwhile, Goldman Sachs slightly raised its price target to $56 but kept a Sell rating due to anticipated challenges in the demand environment and macroeconomic uncertainties. The company has been focusing on expanding its focus categories and leveraging partnerships with platforms like Facebook Marketplace. Additionally, eBay’s management has committed to share buybacks, signaling confidence in its financial strategy amidst economic challenges.
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