Analysts are generally positive on eBay (NASDAQ:EBAY) following results and guidance issued last night:
- UBS notes they think eBay's stock has likely found a support level. While 2Q results and guidance were only in-line, they think that should be good enough for now. The company spent quite a bit of time qualitatively describing how changes in the presentation of core listings and new pricing for Store Inventory listings should lead to improved conversions, higher GMV growth, and stronger overall performance. Basically, the company is getting back to basics in the sense that it is refocusing on driving consumers to core auction-style listings. While the firm is slightly raising their estimates, they would wait until they see proof that the change in listing structure and fees is having the desired impact in the core business before getting more positive on the stock. Rates the stock Neutral. Firm's tgt is $35.
- JP Morgan notes they are encouraged by the buyback announcement as they believe it indicates management confidence in its ability to execute its strategic plan. Also, funding the program with working capital will allow the company to maintain a flexible balance sheet. eBay's upcoming price increases for Store Inventory Format (SIF) listings are intended to encourage sellers to use the core listing format with higher frequency. Such a shift in listing format has the potential to improve conversion rate and auction velocity. Firm's current estimates do not reflect any major improvement in rev/listing and as such they see potential upside. Reits Overweight.
- Goldman Sachs recommends buying eBay shares as they expect the stock to be driven by multiple expansion as 2Q06 results and 2nd derivative changes reinforce firm's 20%-25% 07-10E EPS growth rate and 2007E EPS of $1.30, while the current 21x P/E implies low-teen growth. Several trends should alleviate investor growth rate and estimate concerns: A likely bottom in the rate of yoy revenue/listing declines given the price changes and initiatives to drive a better mix, an expected acceleration in organic growth in 3Q and potentially overall revenue growth, and in 2Q06, accelerating trends in Germany, Korea, and Motors, an acceleration in total listings growth to 35%, and an acceleration in GMV growth. A $2bn share buyback program and an implied FX headwind in guidance vs. the current tailwind are also positive. Reiterates Buy.
Notablecalls: I was surprised to see EBAY's core transaction revs so strong. Thats also the reason why the shares were up in after market trading. Must agree with UBS. Short term bottom is in.
- UBS notes they think eBay's stock has likely found a support level. While 2Q results and guidance were only in-line, they think that should be good enough for now. The company spent quite a bit of time qualitatively describing how changes in the presentation of core listings and new pricing for Store Inventory listings should lead to improved conversions, higher GMV growth, and stronger overall performance. Basically, the company is getting back to basics in the sense that it is refocusing on driving consumers to core auction-style listings. While the firm is slightly raising their estimates, they would wait until they see proof that the change in listing structure and fees is having the desired impact in the core business before getting more positive on the stock. Rates the stock Neutral. Firm's tgt is $35.
- JP Morgan notes they are encouraged by the buyback announcement as they believe it indicates management confidence in its ability to execute its strategic plan. Also, funding the program with working capital will allow the company to maintain a flexible balance sheet. eBay's upcoming price increases for Store Inventory Format (SIF) listings are intended to encourage sellers to use the core listing format with higher frequency. Such a shift in listing format has the potential to improve conversion rate and auction velocity. Firm's current estimates do not reflect any major improvement in rev/listing and as such they see potential upside. Reits Overweight.
- Goldman Sachs recommends buying eBay shares as they expect the stock to be driven by multiple expansion as 2Q06 results and 2nd derivative changes reinforce firm's 20%-25% 07-10E EPS growth rate and 2007E EPS of $1.30, while the current 21x P/E implies low-teen growth. Several trends should alleviate investor growth rate and estimate concerns: A likely bottom in the rate of yoy revenue/listing declines given the price changes and initiatives to drive a better mix, an expected acceleration in organic growth in 3Q and potentially overall revenue growth, and in 2Q06, accelerating trends in Germany, Korea, and Motors, an acceleration in total listings growth to 35%, and an acceleration in GMV growth. A $2bn share buyback program and an implied FX headwind in guidance vs. the current tailwind are also positive. Reiterates Buy.
Notablecalls: I was surprised to see EBAY's core transaction revs so strong. Thats also the reason why the shares were up in after market trading. Must agree with UBS. Short term bottom is in.
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