EBay gains on Q1 beat & strong guidance; analysts raise numbers

EBay gains on Q1 beat & strong guidance; analysts raise numbers
© Reuters. eBay shares surge 5% on Q1 beat & strong guidance

EBay (NASDAQ:EBAY) shares gained more than 2.5% premarket Thursday following the company’s reported Q1 results, with EPS coming in at $1.11, better than the consensus estimate of $1.07.

Revenue grew 1% year-over-year (up 3% on an FX-neutral basis) to $2.5 billion, above the consensus of $2.49B. Gross Merchandise Volume (GMV) fell 5% year-over-year (down 2% on an FX-neutral basis) to $18.4B.

“We saw strength in our focus categories, which once again outpaced the rest of the marketplace. And the combination of eBay’s vast data and AI expertise are accelerating innovation on the platform,” said CEO Jamie Iannone.

For Q2/23, the company expects EPS in the range of $0.96-$1.01, compared to the consensus of $0.99, and revenue in the range of $2.47B-$2.54B, compared to the consensus of $2.43B.

Furthermore, the company declared a cash dividend of $0.25 per share, payable on June 16, 2023, to stockholders of record as of June 1, 2023.

Bernstein analysts hiked the price target by $5 per share to $50.

“GMV growth exceeded expectations reaffirming our view that management’s framework for 2023 growth leans conservative. However, the expense growth outlook was also higher than anticipated, undercutting our view that EBAY could beat the Street on costs in 2023. F/X is a factor, but the bigger takeaway for us is that EBAY is in the midst of an important investment cycle to re-accelerate GMV and Active Buyers,” the analysts wrote in a note.

Morgan Stanley analysts also raised the price target as they went to $34 per share on Underweight-rated EBAY stock.

“Better 1Q GMV trends than feared, albeit still negative, but higher full-year expense outlook with reiterated top line suggest full-year numbers are largely unchanged tonight. Bigger picture, eBay is investing more in focus categories and full funnel marketing to deliver -LSD GMV declines.”

(Additional reporting by Senad Karaahmetovic)

Source: investing.com