Baird Believes eBay Inc. will surprise market expectation in 2nd Half of Calendar Year 2015

On Tuesday, Baird revealed that it thinks eBay Inc. will surprise market estimations. Significantly, as comparables moves into the second half of calendar year 2015. The research firm pointed out that gross merchandise volume growth for April accelerates after Easter. The firm restated its previous rating of Outperform along with $65 price target on the stock of the company.

Andrew Lee, an analyst at Baird said, “Following a slow start to the month (Easter timing related), our proprietary Marketplace survey suggests accelerating merchandise volume growth, with April in the mid-single-digits (estimated at 5%), above March levels (low-single-digits) and consistent with management commentary that trends are turning more favorable, despite lingering search engine optimization (SEO) headwinds. While our data suggests Marketplace growth still noticeably lags overall e-commerce (~15%), we note that trends could surprise to the upside as comps ease into 2HCY15.”

The survey conducted by firm specifies GMV growth in mid-single digits that is still lower than the growth rate of industry, however the sell side firm’s diffident estimate of 1.5% for the United States GMV in the 2^nd half of calendar year 15. While the start of April was particularly not strong, the sell side firm feature this weak growth to an earlier Easter this year, that caused late March and April growth.

Significantly, at weekly current volume levels, Mr. Lee forecasts that the company tracker will move back to low double digit or high single growth by the end of May, keeping in mind that eBay laps the slump in volume last year after issues with data breach, goggle search, and password change. While earlier in 2^nd half of CY15, Mr. Lee believes that data recommends GMV growth in United States is tracking a bit more than the expectations.

The primary data of UK suggests that e-commerce enhanced in April. As per BDO, non-store sales in the month of April rose 23% year over year from 18% in March.

The stock price target is established on 18 times Price to Earnings multiple on the company’s FY16 $3.53 of EPS estimate. The research firm provided a lower multiple to the company compared to 20.5x of peer average, due to eBay’s competitive issues and overall sluggish growth rate.

The Street has Neutral views on eBay Inc. almost 49 analysts covered the stock of the company, out of which 21 assigned Buy rating , while 24 gave Hold rating to eBay’s stock. The twelve month mean stock price target stood at $62.02 that shows an up-side potential of 6.4% compared to trading price at the moment.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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