Investing.com -- eBay reported first-quarter results that exceeded expectations, but the e-commerce giant delivered revenue guidance for the current year that fell just shy of expectations amid weaker consumer as challenges in the global economy persist.
eBay Inc (NASDAQ:EBAY) fell 2.75% in premarket trading Thursday following the report.
eBay announced adjusted earnings of $1.25 per diluted share on revenue of $2.60 billion, compared with analyst estimates for EPS of $1.2 on revenue of $2.53 billion.
Gross merchandise volume, a key measure of growth, rose 1% to $18.6B amid a recovery in user growth.
Active buyers, who paid for a transaction on the eBay platforms within the previous 12-month period, fell 1% to 132M from the same period a year earlier.
"Our Q1 results highlight the resilience of our marketplace and business model amid persistent challenges in the global economy,” said Steve Priest, Chief Financial Officer at eBay.
Looking ahead to Q2, eBay guided adjusted EPS in a range of $1.10 to $1.15 on revenue between $2.49 billion and $2.54 billion. The compared with consensus estimates for EPS of $1.14 and revenue of $2.56 billion.
The company also reiterated expectations to reach positive year-over-year gross merchandise value (GMV) growth in Q3 and Q3, assuming a stable operating backdrop.
eBay declared a cash dividend of $0.27 per share, payable Jun. 14 to shareholders of record as of May 31.
“Coming out of these results, we expect that investor debates will remain centered on the trajectory of GMV into the back half of this year given the volatility in the consumer environment and whether EBAY can maintain sufficient reinvestment levels in key growth areas while expanding margins in 2024 and beyond,” Goldman Sachs analysts commented.
“Longer term, we continue to see several open debates about the company’s competitive positioning within the wider eCommerce and consumer Internet landscape that informs our framing of a more negative risk/reward in the shares,” they added.
Analysts reiterated a Sell rating on EBAY stock and trimmed their target price from $40 to $38.
Meanwhile, Mizuho Securities analysts have maintained a Neutral rating but increased the price target to $49 from $44.
The adjustment is based on a sum-of-the-parts valuation, as they have raised the EBITDA multiple for the ecommerce business from 4.5x to 5x for fiscal year 2025 to reflect improving trends.
(Yasin Ebrahim contributed reporting)