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On Thursday, Stifel analysts adjusted eBay Inc.’s (NASDAQ:EBAY) price target, bringing it down to $63 from the previous $64, while keeping a Hold rating on the shares. The adjustment came after eBay reported fourth-quarter earnings that surpassed expectations, fueled by strong holiday sales, yet provided a first-quarter outlook that didn’t meet analyst projections. The e-commerce giant, currently trading at $69.14 with a market capitalization of $33.12 billion, has demonstrated remarkable strength with a 58.78% return over the past year.According to InvestingPro analysis, eBay appears slightly undervalued, with 8 additional exclusive ProTips available to subscribers, covering everything from dividend history to financial health metrics.
eBay’s focus categories are reportedly growing 6% faster than its core business, and the company has been emphasizing its artificial intelligence initiatives, with 10 million unique sellers having utilized its GenAI features to date. The company’s impressive gross profit margin of 72.02% underscores its operational efficiency. Despite these positive developments, the company’s growth in international markets is currently being hindered by several factors, including lower U.K. take-rates due to a new buyer protection fee that will only affect the second half of the year, a challenging European economic environment, and foreign exchange headwinds.
The company is also experiencing promising outcomes from its consumer-to-consumer (C2C) initiatives in the U.K., which are modeled after successful strategies in Germany. However, these have yet to offset the immediate challenges faced abroad.
In light of these factors, Stifel has revised its estimates and price target for eBay stock. The firm recognizes that while eBay is seeing growth opportunities within its advertising segment and continued investment in GenAI, the full benefits from early-stage initiatives like Facebook (NASDAQ:META) Marketplace and Caramel Autos will require more time to come to fruition. The revised price target reflects these considerations as eBay navigates through the current market conditions.
In other recent news, eBay Inc. reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.25, compared to a forecast of $1.21. Revenue for the quarter reached $2.6 billion, slightly above the expected $2.58 billion. Despite these positive results, the company’s guidance for the first quarter of 2025 suggests a challenging demand environment, influenced by macroeconomic uncertainties and potential tariff impacts. BMO Capital Markets maintained a Market Perform rating on eBay but raised its price target to $63, noting the company’s strong performance in Focus Categories like Trading Cards and Parts & Accessories. Meanwhile, Citi analysts upheld a Buy rating with an $80 price target, emphasizing eBay’s product innovation efforts and partnerships, including those with OpenAI and Facebook Marketplace, as potential growth drivers. Goldman Sachs, however, maintained a Sell rating despite increasing the price target to $56, citing concerns over the company’s first-quarter guidance and broader market conditions. eBay’s strategic focus on AI and targeted acquisitions, such as Goldin and Caramel, is expected to support future growth, with plans for substantial share repurchases in 2025 signaling confidence in its financial strategy.
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