It doesn’t matter if you are buying or selling, you have heard of eBay.
I can say that with some confidence given they have 182 millions accounts, that is just over 2% of the earths population! (7.8 billion people in the world, however eBay is very US centric with over 20% of the users based there.)
But why are we talking about eBay today?
Given the current pandemic, not many people are thinking about buying used cars or heading down to the post office to ship their priceless Beanie Babies.
It is because eBay are welcoming (back) their new (pre-owned, but like new) CEO, a Walmart Executive.
For the past half a year eBay has been running with a temporary CEO while they waited for the perfect bid to show up. Iannone is bringing with him an impressive history focused on the e-commernce world. Given what the pandemic is doing to eBay’s share price, this news couldn’t have come at a better time.
That said, eBay isn’t just for buying and selling “slightly used” clothing or your ex’s stuff, these days it’s professional businesses and selling new goods which is driving the growth.
With PayPal it’s own company, the pandemic causing price gouging issues, and a new CEO stepping into the “used but like new” lime light, is now the time to be investing?
As always, let’s turn to the fundamentals to see if we are bidding on a rare find or a dud.
eBay with it’s large amounts of transactions, up-sell opportunities (premium listings), and shift from just an auction house to a marketplace, has paid off. A high quality score, which misses out on the top 20% but comes close. The big winner here is profitability. Out of #5,504 stocks ranked, eBay has a profitability rank of #49!
In terms of momentum, the analysts and market seem to be indicating that the future is looking promising. Again, this is driven by high forecasts for future earnings and a strong positive sentiment. The new CEO coming on-board will only boost people’s trust in eBay’s future.
This brings us onto the value. I left this till last as it sums up the quality and momentum nicely. Based on the fundamentals the company generates a lot of money, a lot of profit, but compared to their share price it’s an expensive buy.
The future earnings and positive outlooks seems very much priced in already. Which does mean any disappointments, or unexpected pandemics, could rip apart the share price at a moments notice.
We have seen a recent dive in share price which has made the stock a bit cheaper, but compared to their peers, they are still considered an expensive purchase.
What do you think? Is this worth the bid, will you buy and sell, are you going to auction off your investments?
The market has a lot of faith in the future, and eBay has the profitability to back that belief up, but does that make it an investment for you?