The retail world has been undergoing an upheaval recently, with more and more brick-and-mortar stores folding under the mammoth weight of e-commerce. However, amid the apparent confusion, there’s a potential victor quietly consolidating its position. eBay Inc (NASDAQ: EBAY), the seasoned player in the digital marketplace, is standing tall and poised to potentially reap significant benefits amidst these industry upheavals.
In this article, we’ll closely examine what makes eBay stock so promising. We’ll also look at how you can properly position yourself to optimally benefit from trading eBay stock with VSTAR. So without further delay, let’s get right into it.
Latest eBay Developments and News Investors and Traders Should Note
From the introduction, it’s pretty clear that we believe that eBay stock is currently a good buy. Recent developments and news about the eBay marketplace further add to this belief. Here are some latest developments concerning the eBay marketplace that you should be aware of:
● eBay has recently teamed up with global start-up accelerator, Techstars, a global commerce pioneer, to launch the Techstars Future of E-commerce powered by eBay. This new initiative aims to foster start-ups pushing the boundaries of e-commerce technology.
● To further cement its foothold in the digital commerce arena, eBay Inc. has announced a definitive agreement to acquire Certilogo, a company specializing in AI-driven digital IDs and authentication for apparel and fashion goods. This acquisition not only enhances eBay's credibility in the fashion sector but also aligns with the consumers' growing interest in sustainable shopping.
● In addition, The Volte, a platform for luxury dress sharing, has successfully concluded its Series A funding round, spearheaded by eBay Ventures, the venture capital segment of eBay Inc. Aiming to leverage eBay's commitment to recommerce, a commercial partnership is in the pipeline, promising substantial benefits for sellers, buyers, and brands.
All of the above points to the fact that eBay stock is definitely worth buying right now.
eBay Inc's Overview
eBay Inc was founded in 1995 by Pierre Omidyar. It is a multinational e-commerce corporation with its headquarters in San Jose, California. Originally established as AuctionWeb, the platform saw rapid growth, leading to its rebranding as eBay in 1997.
Over the years, eBay has marked significant milestones. Some of these include the following:
● The introduction of the "Buy It Now" feature in 2000
●The acquisition of PayPal in 2002, a relationship that lasted until 2015.
● The acquisition of Skype in 2005
● The transition to a fixed-price marketplace model in 2008, moving away from its initial auction-based setup.
eBay used to operate through three business segments: the Marketplace, Classifieds, and StubHub platforms. However, as of 2023, eBay only operates its Marketplace segment.
The current CEO of eBay is Jamie Iannone. Iannone is a seasoned leader in the tech industry, and he has held executive roles in various notable firms, including Barnes & Noble and Walmart, before bringing his expertise to eBay.
eBay Inc's Business Model and Products/Services
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The eBay business model is a unique one. eBay marketplace operates as a global e-commerce platform, serving as a digital marketplace that bridges buyers and sellers worldwide. It offers an online auction setup where sellers can list items for sale, and buyers can bid on them, facilitating a dynamic marketplace.
eBay generates revenue primarily through transaction fees on its platform. Whenever a sale is made, eBay collects a commission, known as a final value fee.
Additionally, eBay also earns income through listing fees. While sellers can list a certain number of items for free each month, beyond this limit, they are charged a fee for each additional listing. This monetization approach allows eBay to earn revenue regardless of whether an item is sold or not.
Another revenue stream for eBay comes from its promoted listings. Sellers can opt to pay additional fees to have their listings prominently featured in search results, thereby increasing their visibility and potential for sales.
Main Products/Services
eBay offers several different services. Some of the most popular ones include the following:
eBay Stores Markdown Manager: This exclusive tool for Store owners helps amplify sales by allowing sellers to temporarily lower their prices, effectively drawing buyers with promotional deals.
Free Shipping: EeBay now features a "Free Shipping" filter in its search and browse results.
eBay MapIt: eBay MapIt allows buyers to search based on their location. The tool caters to the convenience of local sales.
Skype Buttons: Sellers can integrate a Skype voice or chat button in their listings, offering customers a seamless method to contact them during the buying process.
eBay Inc's Financials, Growth, and Valuation Metrics
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eBay Inc has a market capitalization of 23.24 billion USD. In the first quarter of 2023, eBay reported a net income of $0.567B, marking a significant 142.28% decline compared to the previous year. Similarly, the twelve-month net income ending March 31, 2023, stood at $639M, reflecting a substantial 94.5% decline year-over-year. Despite these challenges, eBay's revenue for the first quarter of 2023 showed a modest increase of 1.09% at $2.510B.
The twelve-month revenue ending March 31, 2023, experienced a 4.32% decline to reach $9.822B. However, over the years, eBay's revenue has shown a positive growth trajectory, rising from $8,650 in 2018 to $9,795 in 2022. As of March 31, 2023, eBay boasts a net profit margin of 6.51%.
Key Financial Ratios and Metrics
What's eBay's PE ratio today? This is certainly useful information to have; however, the question is how does it measure up in terms of the competition? Let’s find out how eBay's PE ratio is when compared to other competitors.
eBay Inc has a good Price-To-Earnings Ratio (36.6x) compared to the peer average (49x). Only Coupang at 141.9x currently has a higher Price-To-Earnings value. However since eBay inc is currently trading at Current Price US$43.46 which is significantly lower that its Fair Value of US$66.04, it is still currently undervalued.
EBAY Stock Performance
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eBay stock is listed on the NASDAQ stock exchange in the United States under the ticker EBAY. The company's initial public offering (IPO) took place on September 24, 1998. Like all NASDAQ stocks, trading hours for eBay stock are from 9:30 AM to 4:00 PM Eastern Time on regular trading days (Monday to Friday, excluding certain U.S. holidays).
eBay shares can also be traded during the pre-market and after-market sessions. The pre-market session runs from 4:00 AM to 9:30 AM Eastern Time, while the after-market session lasts from 4:00 PM to 8:00 PM Eastern Time
Stock Splits: Since its listing, eBay marketplace has undergone a total of 5 stock splits, with the most recent one occurring in July 2015, on the 20th.
Dividends: eBay marketplace currently offers a $0.25 quarterly dividend and an annual dividend yield of 2.23%
Overview of EBAY Stock Performance
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Since its listing on NASDAQ, eBay stock price has experienced quite the run of highs and lows. However it’s most significant and still the highest price level is the 77.99 level. This price high was recorded on October 22, 2021. However upon reaching that peak, eBay stock price plunged massively to the 39.84 level. Since then, eBay stock price has steadily risen and it is the belief of analysis that this steady rise in eBay stock value will continue as price looks to reach and beat its all-time high.
According to the 26 analysts offering for the 12-month price prediction for eBay stock, the median target stands at $49.00, while the high estimate and low estimate are $60.00 and $34.00, respectively. The middle-ground estimate of $49.00 indicates a potential upside of around 12.76% from eBay's last price of $43.46.
Looking ahead, eBay's earnings and revenue are projected to grow by 16% and 3.3% annually, respectively, with an anticipated 18% growth in EPS. Additionally, the company's return on equity is predicted to reach an impressive 39.9% within the next three years. This data suggests a strong potential for investment growth.
Key Drivers of EBAY Stock Price
You should note that although eBay stock prices are expected to rise, there are several factors that contribute to the fluctuation of eBay's stock price. Some key drivers include the following:
● Earnings reports
● Economic conditions
● Industry trends
● Competition
● Regulatory changes
● Company news, e.g., acquisitions and partnerships
For example, Amazon, one of the biggest competition eBay faces recently announced that it would be offering a free returns service where customers would be able to easily return previously purchased items for free without even having to worry about boxing them up or labeling them. This new development could cause “target market” focus to shift to Amazon from eBay, thereby impacting eBay stock prices.
AliExpress, another big competitor has also developed a reputation for having quite the extensive product catalog. This could result in more and more potential customers opting for AliExpress, instead of eBay.
Risks/Challenges and Opportunities
Some potential risks and challenges facing eBay stock include the following:
Competitive Risks
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eBay faces intense competition from various entities in the Internet & Direct Marketing Retail industry, such as Amazon (AMZN), Alibaba (BABA), JD.com (JD), MercadoLibre (MELI), Pinduoduo (PDD), and DoorDash (DASH), to name a few. Smaller platforms like Etsy pose another threat, increasingly attracting the market for used and collectible items, a segment where eBay traditionally excelled.
Let's consider Amazon and Etsy. Amazon's dominance in the retail sector, bolstered by its comprehensive product range and efficient delivery system, presents a significant challenge to eBay. Meanwhile, Etsy's focused approach on handmade, vintage items and craft supplies is slowly eating into eBay's share of the collectibles market.
That said, you should know that eBay does hold a competitive advantage. eBay's competitive advantage lies in its auction-based business model, which is unique compared to Amazon's fixed-price structure and Etsy's focus on handmade goods. eBay also has a very wide customer base, thus giving it the advantage over Etsy and making it a very serious competition for Amazon.
Other Risks
eBay may face the risk of falling user engagement or saturation in some categories. Given the vast nature of its marketplace, it's crucial for eBay to keep refreshing its offerings and ensure a superior user experience to sustain customer interest and loyalty.
Opportunities for Growth and Expansion
eBay has significant potential to expand into different segments. For instance, the company can further its push into new and refurbished goods, augmenting its traditional focus on used products. Additionally, diversifying into advertising and payment services could provide new revenue streams and further integrate users into eBay's ecosystem.
Future Outlook and Expansion
With the global e-commerce market projected to grow exponentially in the coming years, eBay is well-positioned to capitalize on this trend. The company could expand its presence in emerging markets where internet penetration is growing rapidly.
Furthermore, investing in technology and data analytics could help eBay to better understand customer behaviors, allowing it to offer a more personalized shopping experience and drive sales growth.
Trading Strategies for EBAY Stock
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Swing Trading: As a swing trader, you can leverage short-term price movements in eBay stock. You can take a position when you expect eBay stock to rise and close it when you anticipate a decline.
Long-Term Investing: If you believe in the sustainable potential of eBay and its business model, buying and holding eBay stock can be an effective strategy.
Dollar-Cost Averaging (DCA): This strategy involves investing a fixed amount in eBay stock at regular intervals, regardless of price. It's a strategic way to mitigate the impact of volatility on the purchase of eBay stock.
Event-Driven Strategy: If you closely monitor eBay and understand the factors that could influence its stock price, you might opt to trade based on specific events. For instance, you could buy eBay stock ahead of a promising earnings report and sell once the event has concluded.
CFD Trading:Trading CFDs allows you to speculate on the rise and fall of eBay stock without owning the underlying stock. If you predict eBay stock will rise, you would 'buy' or 'go long' on a CFD. Conversely, if you predict eBay stock will fall, you would 'sell' or 'go short.’
Each strategy involves different levels of risk and necessitates a different level of skill and knowledge; however, it has to be said that of all of the above, CFDs remain the best option.
Advantages of CFD
Here are some advantages of trading CFDs:
● Leverage: CFDs are a leveraged product, which means you only need to deposit a small percentage of the full value of the trade to open a position. This can magnify your profits, but it can also amplify your losses if the market moves against you.
● With CFDs, you can speculate on and make money off price movements in either direction.
● Access to Global Markets: CFD brokers like VSTAR offer products in all of the world's major markets. This means you can trade various assets, including shares, indices, commodities, and more, from the same platform.
● No Stamp Duty
Key Resistance & Support Levels of EBAY Stock
Are you looking to trade eBay stock? If you are, then here are some key resistance and support levels of eBay stock you’ll want to pay attention to.
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eBay stock’s most recent major low is around the 35.99 level (12th October 2022). After that low, price rallied to reach around the 52.27 level, breaking the former major high of 50.83. After that, price fell to around the 40.20 area. Since then, however, eBay's stock price has been rallying, and it sits around the 44 and 46 level. There’s no doubt that the price will be looking to reach and beat the previous high of 52.27.
Trade EBAY Stock CFD at VSTAR
If you want to trade eBay stock CFDs, you should know that you’ll need a CFD provider. Don’t know any? Not to worry, we have an excellent recommendation for you, VSTAR!
VSTAR is a fully regulated institutional-level trading platform that offers amazing perks like deep liquidity, low trading costs, and lightning-fast execution.
Advantages of VSTAR
There are numerous benefits to trading eBay stock with VSTAR. Some of these include the following:
Enhanced Leverage: With VSTAR, you can enjoy leverage of up to 1:200 when trading eBay stock. This means that for every dollar in your trading account, you can control up to $200 worth of eBay stock.
Competitive Spreads: VSTAR offers competitive spreads as low as 0.0 pips on major currency pairs when trading eBay stock. This ensures that you’ll be able to maximize your potential profits.
Instant Execution: When trading eBay stock with VSTAR, your orders will be filled at the best market prices available and executed within milliseconds. This ensures that you will be able to enter and exit positions quickly, taking advantage of favorable market conditions without delays.
24/5 Trading Opportunities: VSTAR also offers round-the-clock trading opportunities, allowing traders to take advantage of market movements 24 hours a day, five days a week. This means that you can react to breaking news or economic events that may impact the eBay stock price, even outside regular trading hours. Thus providing you with more flexibility and potential opportunities.
Conclusion
All the signs point to an even more successful 2023 for eBay stock, with experts predicting a potential high estimate of up to $60. CFDs provide the best way to leverage this potential eBay stock-buying opportunity. So download the VSTAR app today to get started with eBay stock trading.
