Is eBay Inc. (EBAY) A Good Investment?

eBay Inc. (NASDAQ:EBAY) trading with a subtraction of -$0.16 to $74.74 on Thursday, a downside of -0.21 percent. An average of 2,912,507 shares of common stock have been traded in the last five days. There was a gain of $0.51 in the past week, and it reached a new high 29 times over the past 12 months. The last 20 days have seen an average of 4,716,062 shares traded, while the 50-day average volume stands at 6,262,973.

EBAY stock has increased by 4.92% in the last month. The company shares reached their 1-month lowest point of $68.28 on 10/04/21. With the stock rallying to its 52-week high on 08/30/21, shares of the company touched a low of $45.36 and a high of $77.83 in 52 weeks. It has reached a new high 31 times so far this year and achieved 49.05% or $24.43 in price. In spite of this, the price is down -3.98% from the 52-week high.


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Insider Transactions

7 days have passed since eBay Inc. (EBAY) last reported insider trading activity. SWAN ROBERT HOLMES, who is Director, most recently acquired $20,000 shares at $75.00 per share on Oct 07. In this transaction, the insider spent $1,500,000. SVP, Chief Product Officer, Thompson Pete, disposed of 1,394 shares at a price of $74.89 on Sep 17. The insider now owns more than $104,397 worth of shares. Prior to that, VP, Chief Accounting Officer Doerger Brian J. went on to Sale 2,862 shares at $77.69 each on Aug 30. An amount of $222,350 was transacted.

Valuation Metrics

eBay Inc. (EBAY) has a trailing price-to-earnings (P/E) ratio of 23.02, which compares with the 21.00 for the broader industry and 31.24 for the sector. In the last five years, eBay Inc.’s PE ratio has ranged between 21.12 and 3.485. The stock’s beta is 1.10. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 4.46, the price-to-book (PB) ratio at 3.88, and the price-to-cash flow ratio at 23.73.

eBay Inc. pays a $0.72 dividend per share annually. It offers a dividend yield of 0.96%. The company has a payout ratio of 3.60%. The company’s most recent quarterly dividend payment took place on Sep. 17, and it was $0.18 a share, without any change from last year. Its dividend has been increased for the last 2 consecutive years with the latest increase dividend $0.02 reported on Wednesday February 3 2021.

eBay Inc. will next go ex-dividend on 30-Nov-2021. The next dividend payment eBay Inc. will make is expected to be $0.18.

The quick ratio of eBay Inc. for the three months ended June 29 was 4.00, and the current ratio was 4.00, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.64 and a total debt to equity ratio of 0.70 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 75.20% against a 5-year average of 76.8%. eBay Inc.’s EBITDA margin for the year ending June 29 is 32.27%, while its operating margin for the same period stands at 27.20%. Its gross profit as reported stood at $7.8 billion compared to revenue of $10.27 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, eBay Inc.’s return on assets was 58.70%, compared to 16.0% over the last five years. In the past year, the return on investment has been 15.80%, and the 5-year average is 24.0%. Meanwhile, the return on equity (ROE) for the past 12 months has been 222.70% and the 5-year average holds at 64.9%. For the broader industry, ROE averaged 10.33 over the past year.

Earnings Surprise

For the three-month period that ended June 29, eBay Inc. had $8.33 billion in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $10.73 billion in the quarter, while revenues of $641.0 million were grew 93.05%. The analyst consensus anticipated eBay Inc.’s latest quarter earnings to come in at $0.95 per share, but it turned out to be $0.99, a 4.20% surprise. For the quarter, EBITDA amounted to $853.0 million. Shareholders own equity worth $650.06 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at eBay Inc. (EBAY) price momentum. RSI 9-day as of the close on 13 October was 61.15%, suggesting the stock is Neutral, with historical volatility in this time frame at 28.84%.

As of today, EBAY’s price is $74.76 +0.69% or $0.51 from its 5-day moving average. EBAY is currently trading -0.03% lower than its 20-day SMA and +22.49% higher than its 100-day SMA. However, the stock’s current price level is +9.82% above the SMA50 and +46.83% above the SMA200.

The stochastic %K and %D were 84.35% and 84.05%, respectively, and the average true range (ATR) was 1.70. With the 14-day stochastic at 83.44% and the average true range at 1.74, the RSI (14) stands at 57.36%. The stock has reached 1.64 on the 9-day MACD Oscillator while the 14-day reading was at 2.43.

Analyst Ratings

The consensus rating for eBay Inc. (EBAY) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell EBAY, while 15 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 3 analysts, while 8 others rate it as a “buy”.

What is EBAY’s price target for the next 12 months?

Analysts predict a range of price targets between $63.00 and $85.00, with a median target of $74.50. Taking a look at these predictions, the average price target given by analysts for eBay Inc. (EBAY) stock is $73.78.

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