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Longer-Term Questions Persist for eBay

Despite the positives in eBay’s results, competitive headwinds are building, and investors should wait for a better price before diving in, writes Morningstar’s R.J. Hottovy.

Nevertheless, we still have lingering questions about GMV growth in the U.S. (up just 3%) and a deceleration in items sold growth (7%, versus a trailing 12-month average of 9%), which we attribute to greater competition for small and midsize business, or SMB, sellers, particularly Amazon. With

We retain our $28 fair value estimate. Despite positives from structured data efforts, international growth, and $2.4 billion in remaining share-repurchase authorization, we'd prefer a wider margin of safety, given potential competitive headwinds.

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About the Author

RJ Hottovy

Sector Strategist
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R.J. Hottovy, CFA, is a consumer strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He is responsible for consumer discretionary and staples research. He has covered the consumer sector as an analyst and director of global consumer equity research for Morningstar since joining the company in 2008, and specializes in a broad range of consumer categories including restaurants, footwear and apparel retailers, consumer electronics retailers, fitness clubs, home improvement and furnishing retailers, and consumer product manufacturers.

Before joining Morningstar, Hottovy was a director and senior stock analyst for Next Generation Equity and an analyst for William Blair & Co., specializing in a wide range of retail and consumer product companies. He also spent two years at Deutsche Bank, covering waste management, water utilities, and equipment rental stocks.

Hottovy holds a bachelor’s degree in finance and a second degree in computer applications from the University of Notre Dame, where he graduated magna cum laude. He also holds the Chartered Financial Analyst® designation and is a member of the CFA Institute and the CFA Society of Chicago.

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