Valens Research Weekly Equity Idea Highlight for January 23, 2019 – eBay Inc.
This week the Valens Research team highlights our most interesting equity insight from across our tools and our analysis.
EBAY is a winning investment with robust returns, strong economic moats, and management that is properly aligned and showing more confidence that imply low market expectations are too pessimistic
Current market expectations for EBAY are excessively pessimistic. Markets expect
UAFRS-based (Uniform) ROA (ROA’) to decline significantly going forward, even though ROA’ has been remarkably stable since the company spun off the PayPal business in 2015. However, EBAY has robust economic moats in both their core marketplace and their StubHub segments, where they are market leaders with strong competitive advantages, which give reasons for them to sustain their 3x or higher returns going forward.