The eBay stock price has done well in the past few years, and is nearing the highest level since November 2021. It has done by over 102% from the lowest point in 2022, bringing its market cap to over $33 billion. So, what next for the eBay share price ahead of its earnings on Wednesday?
eBay has struggled in the past few years
eBay, a company that was seen a viable alternative to Amazon, has struggled in the past few years as its growth remained muted. It annual revenue in 2023 came in at $10.1 billion in 2023, slightly higher than the $9.7 billion a year earlier.
eBay has faced elevated competition from the likes of Amazon, Wayfair, and Walmart. Still, data shows that the company is still highly popular among users. It had over 133 million buyers in the third quarter of last year.
The company had a gross merchandise volume of $18.3 billion. Most recently, data shows that eBay’s website had over 639 million visitors in January, a sign that it is still a big player in the ecommerce industry.
The most recent results showed that eBay’s revenue was $2.6 billion in the third quarter as the number of enthusiast buyers jumped to 16 million.
eBay’s growth has been driven mostly by its international business. For example, the US Gross Merchandise Volume (GMV) slowed to $8.7 billion in Q3, whil the international one rose to $9.6 billion.
The company’s revenue growth has been partly because of its advertising segment whose revenue rose to $396 million in Q3.
Earnings ahead
The next key catalyst for the eBay stock price will be its fourth-quarter earnings scheduled on Wednesday. The guidance is that its revenue will be between $2.53 billion and $2.59 billion. Its performance will be moderate because of it phased monetization of its consumer-to-consumer business in the UK.
eBay’s operating margin is expected to be between 26.5% and 275, while the EPS will be between $1.17 and $1.22.
According to Yahoo Finance, the average revenue estimate by Wall Street analysts is that its revenue will be $2.58 billion. That revenue will bring the annual figure to $10.28 billion, a 1.68% increase from a year earlier.
eBay’s earnings per share is expected to be $1.12, higher than the $1.02 it made in the same quarter in 2023.
A potential catalyst for the eBay earnings will be the recent integration with Facebook Marketplace that gives it access to billions of users globally.
The other catalyst is that the company is actively returning funds to shareholders. It recently boosted its share repurchase program by $3 billion. These repurchases have helped it to drastically reduce its outstanding shares frm over 705 million in 2020 to 482 million today.
eBay stock price forecast
eBay stock chart by TradingView
The weekly chart shows that the eBay share price has been in a strong bullish trend in the past few years as it surged from $34.25 in October 2022 to $70. It has remained above the 50-week and 200-week moving averages.
The Relative Strength Index (RSI) has continued rising and is nearing the overbought level of 70. Also, the MACD indicator remains above the zero line.
Therefore, trend following suggests that the eBay stock price will continue rising as bulls target the all-time high of $75.85.
However there is a risk in that the eBay stock price has continued to form a rising wedge chart pattern. This pattern is made up of two ascending and converging trendlines. In most cases, a bearish breakdown typically happens when the two lines near their confluence.
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