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eBay Q4 Preview: Can The Earnings Streak Continue?

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Everybody knows how critical earnings season is, with companies finally pulling back the curtain and unveiling what’s transpired behind closed doors.

We’re well into the season so far, with the feared earnings apocalypse yet to show its face.

And in the coming weeks, many more companies are slated to report.

One such company, eBay (EBAY - Free Report) , is on deck to unveil its Q4 results on February 22nd, after the market close.

eBay operates as an online shopping site that allows visitors to browse through available products listed for sale or auction through each company's online storefront.

How does the company stack up heading into its release? We can use results from Amazon (AMZN - Free Report) as a small gauge.

Amazon Q4

Amazon posted better-than-expected earnings results, exceeding the Zacks Consensus EPS Estimate by 40%.

Quarterly revenue totaled $149.2 billion, nearly 3% above our consensus estimate and growing roughly 8.5% year-over-year. Below is a chart illustrating AMZN’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, we can look at the company’s net sales results from its Online Stores to help guide us lightly for eBay’s upcoming release.

AMZN’s Online Stores net sales tallied $64.5 billion throughout the quarter, just marginally falling short of the Zacks Consensus Estimate and slipping roughly 2.4% year-over-year.

As we can see in the chart below, the company has regularly fallen short of estimates within this metric.

Zacks Investment Research
Image Source: Zacks Investment Research

eBay

Quarterly Estimates –

Analysts have had mixed reactions to the quarter to be reported, with a single downward and upward earnings estimate revision hitting the tape. The Zacks Consensus EPS Estimate of $1.05 suggests zero change from the year-ago quarter.

Zacks Investment Research

Image Source: Zacks Investment Research

Our consensus revenue estimate for the quarter stands firm at $2.5 billion, indicating a pullback of roughly 6% year-over-year.

Quarterly Performance –

eBay has regularly posted better-than-expected results, exceeding the Zacks Consensus EPS and Sales Estimate in five consecutive quarters.

Just in its latest release, eBay penciled in a 7.5% earnings beat and reported sales 3% above expectations.

Zacks Investment Research
Image Source: Zacks Investment Research

Valuation –

eBay shares presently trade at a 14.1X forward earnings multiple, beneath the 17.3X five-year median and the Zacks Retail and Wholesale sector average.

Zacks Investment Research
Image Source: Zacks Investment Research

Further, the company’s forward price-to-sales currently works out to be 2.8X, again below the five-year median but above the Zacks sector average.

Zacks Investment Research
Image Source: Zacks Investment Research

eBay carries a Style Score of “B” for Value.

Putting Everything Together

Earnings season is one of the most critical periods for stocks, and for obvious reasons.

So far, we’ve received an extensive list of quarterly prints, and many more are on their way in the coming weeks.

Next week, we’ll receive FY22 Q4 results from eBay on February 22nd, after the market close.

In Amazon’s (AMZN - Free Report) quarterly print, the company marginally fell short of estimates regarding Online Stores net sales, extending the streak of negative surprises within this metric.

For eBay’s upcoming release, analysts have had mixed reactions, with estimates suggesting zero change in earnings and a decrease in revenue year-over-year.

In addition, eBay has consistently posted better-than-expected results, exceeding both earnings and revenue estimates consistently as of late.

Heading into the release, eBay (EBAY - Free Report) is a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.9%.


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