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eBay Shares Lower Despite Earnings Beat

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Shares in online retailer eBay continue to slide this week with the company’s stock trading a little lower pre-market on Friday.

The sell-off comes despite a generally positive risk environment and a better-than-expected set of Q3 results.

Revenues & Earnings Higher

EBay recently reported third-quarter earnings per share of $0.94. This beat estimates of an $0.76 EPS.

Revenues were also better than expected at $2.6 billion, beating estimates of $2.48 billion in revenues and marking a 25% increase on the same quarter a year prior.

Looking at the breakdown of the data, the company reported a third-quarter net income of $621 million. eBay also reported that its GMV was up 22% year on year to $25 billion while its annual active buyer’s number rose by 5% year on year to 183 million.

On Platform Payments Processing Increases

The company also noted that it had sold its classifieds business to Norwegian company Adevinta earlier in the year for $9.4 billion and is on course to complete the handing over of the business by Q1 2021.

Elsewhere, the company said that its managed payments business has 340k active users with over 20% of eBay’s on-platform transaction volume being processed by the system.

Revenues from its promoted listings feature were higher by 77% at $186 million over the quarter.

Looking Ahead (Q4 Guidance)

Looking ahead, eBay offered Q4 revenues guidance of between $2.64 billion and $2.71 billion with adjusted profit guidance of between $0.78 and $0.84. In terms of 2020 as a whole, eBay now projects net revenues of between $10.04 billion and $10.11 billion with earnings per share of between $3.34 and $3.40.

This is above the current Wall Street forecasts of $9.92 billion in revenues and earnings per share of $3.23.

EBay has benefitted firmly from the explosion in online retail as a result of the global lockdowns and social restrictions in place this year.

With lockdowns in place across many European countries, this dynamic is likely to continue across the remainder of the year. However, in light of the vaccine news online retail is likely to recede next year with this outlook dampening current price action in eBay’s shares.

eBay Shares Continue Lower in Bear Channel

ebay shares

Shares in eBay continue to trend lower as the correction from July’s highs continues.

Price is currently sitting in the lower end of the bearish channel which has framed the correction and is now trading below the 47.47 level once again.

While below here, shares are vulnerable to a break of the channel low which will bring the 42 level support into play. To the topside, any rebound higher will face resistance at the 53.61 level.

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