3 Takeaways From eBay's Quarter
Efficiency plan and portfolio review are positives, but questions linger about the core business.
We see three takeaways from narrow-moat eBay's (EBAY) third-quarter update, the company's first since the departure of CEO Devin Wenig.
First, competitive and regulatory (sales tax collection among small sellers) headwinds are likely to pressure gross merchandise volume growth, partly neutralize efficiency plans, and keep revenue and operating profit growth confined to the low- to mid-single-digit range near term. EBay's updated 2019 outlook for revenue of $10.75 billion-$10.80 billion (2%-3% growth) and adjusted earnings per share of $2.75-$2.78 strikes us as realistic, as does its initial 2020 outlook for low-single-digit revenue and EPS growth. We expect modest acceleration in subsequent years due to advertising and payments, but it's still difficult to identify a tangible path to matching the low-double-digit growth we expect from the global online commerce industry.
R.J. Hottovy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.