May 6, 2019

EBAY – Given management’s confidence in their platform, EPS, and debt, bearish market expectations are unwarranted, and upside is likely


  • eBay Inc. (EBAY:USA) is currently trading well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.1x Uniform P/E, implying bearish expectations for the firm. However, this is likely unwarranted given management’s confidence in their payments platform, EPS growth, and debt financing, justifying outperformance going forward
  • Specifically, management is confident in the launch and adoption of Google Pay, as well as the success of their payments platform trial, without PayPal. In addition, they are confident in marketing spending decreases, total Marketplace revenue growth, and margin-driven EPS growth. Moreover, they are confident in take rate tailwinds from FX and Promoted Listings, and their ability to pay down their debt.
To read this Embedded Expectations Analysis report in its entirety, please log into the Valens Research web app. If you don't have an account, you can sign up for the 30-day trial.