What 5 Analysts Think Of EBay's Mixed Guidance For Q2

What 5 Analysts Think Of eBay's Mixed Guidance For Q2

Image Source: eBay

eBay Inc (EBAY) shares pulled back sharply after issuing mixed guidance for the second quarter.

The eBay Analysts

  • BofA Securities analyst Justin Post reiterated a Neutral rating on eBay shares and lowered the price target from $71 to $68.
  • Morgan Stanley analyst Brian Nowak maintained an Equal-weight rating and a $63 price target.
  • Wedbush analyst Ygal Arounian downgraded eBay shares from Outperform to Neutral and reduced the price target from $74 to $63.
  • KeyBanc Capital Markets analyst Edward Yruma maintained an Overweight rating and an $80 price target.
  • Raymond James analyst Aaron Kessler maintained a Market Perform rating.

GMV Commentary Adds Uncertainty, BofA Says: 

eBay reported first-quarter revenues of $3.02 billion and EPS of $1.09, ahead of the Street estimates of $2.97 billion and $1.06, respectively, BofA analyst Post said in a note.

With stimulus benefits arriving in the first quarter, U.S. gross merchandise volume growth was strong at 36% year-over-year, the analyst noted. U.S. revenue growth of 56% was achieved on the back of management payments rollout accelerating to 80% complete in the U.S., he added.

The guidance for a year-over-year decline in gross merchandise volume in the second quarter, with the weakness possibly lasting through the fourth quarter, overshadowed the quarterly results, the analyst said. "While commentary on tech-led innovation in sneakers, trading cards, and other categories suggests underlying progress on eBay, commentary on future GMV will likely add some uncertainty on post-COVID growth rates," Post wrote in the note.

Morgan Stanley: eBay a "Show-me Story"

The first-quarter results and the second-quarter guidance were largely in line, Morgan Stanley analyst Nowak said. With reopening uncertainties lingering, eBay remains a "show-me" story, he added. The analyst discussed multiple growth initiatives the company is investing in, which can drive structural growth. Execution is key, he added.

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