eBay stock jumps in premarket trading after revenue report

The multinational e-commerce corporation, eBay, enjoyed an 8.8% jump in shares in premarket trading Thursday. The surge in the company’s stock came after eBay announced a quarterly performance exceeding expectations. Due to the increase in sales, the eBay predicts adjusted earnings ranging between $1.02 and $1.06 per share. If this forecast turns out to be true, the actual results will significantly surpass the analysts’ forecasts for earnings of 78 cents per share.

Despite the worldwide coronavirus pandemic, the growth of the company’s gross merchandise volume (GMV) started in April and continued through May. This led to predictions for total volume growth of 23-26% for the second quarter of the fiscal year.

The increase in sales is noticeable in different sectors like Auto Parts, Collectibles, Electronics, Fashion and Home & Garden. The boost in demand is due to the climb in organic traffic during the pandemic, improved marketing and higher website conversion rates.

In April and May, the number of active buyers increased with roughly 6 million new and reactivated users of the e-commerce platform. The lockdowns forced businesses to resort to the services of eBay, which also accelerated the number of sellers who joined the website.

The e-commerce company put effort into supporting retailers during the crisis. This is why eBay announced that first-time sellers will be allowed to make free sales during the entire month of June. This offer will be available for use up to 5 times during the promotional period.

After eBay updated its second-quarter guidance, the new expectations for the revenue are ranging between $2.75 billion and $2.80 billion. This is a definite increase from the previous guidance for revenue of $2.38 billion and the analyst predictions for $2.46 billion.

Analyst stock price forecast and recommendation

According to CNN Money, 27 analysts who offer 12-month price forecasts for eBay Inc. have a median target of $42.00, with a high estimate of $52.00 and a low estimate of $30.00. The median estimate represents a -15.29% decrease from the last price of $49.58.

The same media also provides the recommendations of 31 analysts who have a consensus rating of “Hold” for the eBay Inc. stock. Out of all 31 analysts, 16 ranked the company’s stock as “Hold”, 11 as “Buy”, 3 as “Sell” and 1 – as “Outperform”.