Recent Dip Providing Buying Opportunity On Ebay

When eBay (EBAY) reported earnings on April 28, the company beat on both the EPS estimate and the revenue estimate. Unfortunately, the company’s outlook disappointed investors and analysts alike and the stock has since tumbled 7.5%. The stock had also dropped in the week leading up to the earnings and report and since peaking on April 16, the stock has fallen over 11%.

There could be good news on the horizon though. There is a trend line that connects the lows from last November and from March, and the stock just hit that trend line last week. We could see a bounce from here as the disappointment from the earnings outlook wanes in people’s memories.

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As you can see on the chart, the 52-week moving average is just below the trend line and that gives the stock a dual-layer of support. We also see that the overbought/oversold indicators have moved down rather sharply after being near or on overbought territory. The 10-week RSI just dipped below the 50-level and that is about as low as it has been in the past year. None of the little dips in the past year have caused the RSI to drop below the 40-level.

The Chart Only Tells Part of the Story—the Fundamentals are Strong Too

Digging in to the fundamental analysis for eBay we see that the company scores very highly in a number of different categories. In all, there are five fundamental indicators where the stock scores well on the Tickeron Fundamental Screener. The highest score of the bunch is the SMR rating and it’s a 7. The Valuation rating is a 14 and the Profit vs. Risk rating is a 19. The P/E Growth rating is at 22 and the stock also gets a positive mark for its Seasonality score.

(Click on image to enlarge)

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If we look at the individual stats that make up some of these indicators, it’s easy to see why the company scores so well. eBay has seen earnings grow by 20% per year over the last three years and they jumped 58% in Q1. Analysts expect earnings to increase by 15% for 2021 as a whole.

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Disclaimer: Although our services incorporate historical financial information, past financial performance is not a guarantee or indicator of future results. Moreover, although we believe the ...

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