eBay Stock Forecast
In 2021, e-commerce companies enjoyed boom times. That’s changing. eBay stock forecast shows bleak first-quarter results for 2022. However, it’s in a similar situation to many other online retailers. As the pandemic winds down, so does the pace of online shopping. Global supply chain disruptions continue. But, this affects other e-commerce companies more than eBay (Nasdaq: EBAY). However, eBay executives expect results to improve by the end of the year.
eBay Stock Forecast and History
Founded in 1995 in San Jose, California, eBay currently connects buyers and sellers in 190 markets worldwide. The company pioneered online “recommerce,” the buying and selling of pre-owned goods.
In 2002, eBay bought PayPal and it became the company’s primary payments provider. Additionally, in 2015, eBay completed the divesture of PayPal and its former payments provider became an independent company. And, in 2005, the company acquired Skype, which it sold to Microsoft in 2011 for $8.5 billion. Other companies eBay has acquired and sold include StubHub and Flipkart. Furthermore, in 2020, eBay sold its eBay Classifieds to Adevinta in a $9.2 billion deal.
eBay Buyer Decline
In the fourth quarter of 2021, eBay reported 147 million buyers worldwide. However, the number of annual active buyers on eBay declined 9% overall.
During that same period, its Gross Merchandise Volume (GMV) was $20.7 billion, with $2.6 billion in revenue. Of that, 52% of revenue came from international operations. Sellers numbered 17 million. Of its GMV, $12.8 billion came from mobile volume.
Keep reading for more information on eBay stock forecast.
New Fee Model
eBay makes money by charging fees to sellers through transactions. There are no fees for buyers. The company recently introduced a new fee model. As of March 1, 2022 final value store fees for store sellers increased by 0.3%, from 11.7% to 12%. Final value fees for sellers without stores rose by 0.35% in most categories. For example, that’s an increase of 12.55% to 12.9%.
In addition, eBay increased its subtitle listing fee by $0.50 on items with a “Buy It Now” or “Auction Start” price of up to $150. That means auction listings are now $1.50 and fixed-price listings are $2.
eBay Long Term Strategy
On March 10, 2022, eBay hosted its first Investor Day under CEO Jamie Iannone. According to Iannone, “We are building an eBay for the future by doubling down on what we do best, connecting sellers and buyers of non-new in-season products. We see incredibly compelling growth potential in this market and believe it is our opportunity to win by sharpening our focus and continuing to create value through a tech-led reimagination of eBay.” In addition, he added they have the right team and vision to deliver on these goals and continuing to return value to shareholders. Iannone touted a “reimagination” of eBay.
For the Fiscal Year 2022, eBay stock forecast expects its GMV to decline between 5% and 8%. Revenue is predicted to rise by 0% to 3%. Its diluted Non-GAAP earnings-per-share (EPS) ranges between $4.20 and $4.40.
In FY 2023, eBay stock forecast expects its GMV to rise between three and 4%. For FY 2024, the expectation is an approximately 5% rise in GMV. The revenue outlook for FY 2023 is a gain of 5%, with a 7% to 8% gain for FY 2024. Additionally, the diluted Non-GAAP EPS for FY 2023 rises by about 10%, and for FY 2024 by 15%.
The eBay Vault
eBay is the largest trading platform for collectibles and trading cards. The company plans to launch its eBay Vault in the second quarter of 2022. In addition, this 31,000 square foot secure storage facility and digital marketplace allow customers to know their valuables are secure. They can then resell them instantly, without the need to again authenticate, package or ship the item. Within the next few years, eBay expects the Vault will hold $3 billion in valuables. This will make it among the largest stores of non-governmental assets on the planet.
eBay Digital Wallet
Also new for the second quarter of 2022 is eBay’s first digital wallet. Sellers can use this digital wallet to make other purchases from sales proceeds or pay sales expenses. In addition, the company has explored but has not committed to the possibility of crypto payments with its wallet.
eBay Stock Forecast Considerations
Although eBay ranks third among online retailers, after Amazon and Walmart, its business model does not depend upon warehouses and supply chains as do these behemoths. While eBay’s volume is huge, it doesn’t sell its own products. There’s no need for it to spend money on inventory or fulfillment centers, with the exception of the eBay Vault. When analyzing eBay stock forecast and predictions, keep in mind that millennials and Generation Z especially like the environmental impacts of buying and selling used items.
About Jane Meggitt
Jane Meggitt specializes in writing about personal finance. Besides investing and planning for retirement, she writes about insurance, real estate, credit cards, estate planning and more. Her work has appeared in dozens of publications, including Financial Advisor, Zack’s, SF Gate and Investor Junkie. A graduate of New York University, Jane lives on a small farm in New Jersey horse country.