eBay Inc. (EBAY - Free Report) reported third-quarter 2022 non-GAAP earnings of $1.00 per share, which beat the Zacks Consensus Estimate by 7.5%. The bottom line increased 11% year over year.
Net revenues of $2.38 billion surpassed the Zacks Consensus Estimate of $2.31 billion. However, the figure decreased 5% from the year-ago quarter’s figure on a reported basis and 2% on an FX-neutral basis.
This was attributed to the softness in transactional activities on eBay’s platform and sluggish marketing services. EBAY witnessed a year-over-year decline of 11% in the active buyer base, which stood at 135 million at the end of the third quarter.
eBay witnessed a declining gross merchandise volume (GMV) in the third quarter, which remained an overhang.
Nevertheless, strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $249 million, up 19% on a reported and 27% on an FX-neutral basis from the prior-year quarter’s respective levels. This drove the momentum across EBAY’s first-party advertising products.
Moreover, total advertising offerings yielded $290 million revenues, which grew 14.6% on a year-over-year basis.
GMV Details
EBAY’s total GMV of $17.7 billion in the reported quarter exhibited year-over-year declines of 11% and 5% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $17.4 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 49.1% of the total GMV, down 7% from the year-ago quarter’s level.
International GMV was $9.02 billion, accounting for 50.9% of the total GMV. It fell 15% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types.
Net Transaction: eBay reported net transaction revenues of $2.26 billion in the quarter under review, accounting for 94.9% of the total revenues. The figure was down 4% from the year-ago quarter’s level.
Marketing Services and Other: eBay generated $121 million of total marketing services and other revenues (5.1% of total revenues), down 20% from the year-ago quarter’s level.
Operating Details
In the third quarter, eBay’s gross margin was 72.8%, contracting 10 basis points (bps) year over year.
Operating expenses of $1.2 billion rise 0.3% year over year. As a percentage of net revenues, the figure expanded 250 bps to 48.9% from the year-ago quarter’s level.
The non-GAAP operating margin was 28.9% in the third quarter, contracting 280 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash equivalents and short-term investments were $3.5 billion, up from $3.2 billion as of Jun 30, 2022.
Long-term debt was $6.579 billion at the end of the reported quarter, flat with the last reported quarter’s level.
EBAY generated $735 million of cash from operating activities in the third quarter, down from $577 million in the second quarter.
Its free cash flow stood at $633 million in the reported quarter.
eBay repurchased $301 million worth of shares and paid out dividends of $120 million in the reported quarter.
Guidance
For fourth-quarter 2022, eBay expects revenues of $2.42-$2.50 billion. On an FX-neutral basis, the year-over-year decline in revenues is anticipated to be 4-1%. The Zacks Consensus Estimate for revenues is pegged at $2.47 billion.
Non-GAAP earnings per share are anticipated between $1.03 and $1.09. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2022, EBAY revised its revenue guidance to $9.71-$9.79 billion, suggesting a decline of 4-3% on an FX-neutral basis from the number reported in 2021. Previously, eBay projected revenues between $9.6 billion and $9.9 billion. The Zacks Consensus Estimate for revenues is pegged at $9.71 billion.
eBay raised guidance for non-GAAP earnings per share from $3.95-$4.10 to $4.07-$4.13. The Zacks Consensus Estimate for the same is pegged at $4.04 per share.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are DICK’s Sporting Goods (DKS - Free Report) , Home Depot (HD - Free Report) and Ross Stores (ROST - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DICK’s is scheduled to release third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.
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eBay Inc. (EBAY - Free Report) reported third-quarter 2022 non-GAAP earnings of $1.00 per share, which beat the Zacks Consensus Estimate by 7.5%. The bottom line increased 11% year over year.
Net revenues of $2.38 billion surpassed the Zacks Consensus Estimate of $2.31 billion. However, the figure decreased 5% from the year-ago quarter’s figure on a reported basis and 2% on an FX-neutral basis.
This was attributed to the softness in transactional activities on eBay’s platform and sluggish marketing services. EBAY witnessed a year-over-year decline of 11% in the active buyer base, which stood at 135 million at the end of the third quarter.
eBay witnessed a declining gross merchandise volume (GMV) in the third quarter, which remained an overhang.
Nevertheless, strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $249 million, up 19% on a reported and 27% on an FX-neutral basis from the prior-year quarter’s respective levels. This drove the momentum across EBAY’s first-party advertising products.
Moreover, total advertising offerings yielded $290 million revenues, which grew 14.6% on a year-over-year basis.
GMV Details
EBAY’s total GMV of $17.7 billion in the reported quarter exhibited year-over-year declines of 11% and 5% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $17.4 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 49.1% of the total GMV, down 7% from the year-ago quarter’s level.
International GMV was $9.02 billion, accounting for 50.9% of the total GMV. It fell 15% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types.
Net Transaction: eBay reported net transaction revenues of $2.26 billion in the quarter under review, accounting for 94.9% of the total revenues. The figure was down 4% from the year-ago quarter’s level.
Marketing Services and Other: eBay generated $121 million of total marketing services and other revenues (5.1% of total revenues), down 20% from the year-ago quarter’s level.
Operating Details
In the third quarter, eBay’s gross margin was 72.8%, contracting 10 basis points (bps) year over year.
Operating expenses of $1.2 billion rise 0.3% year over year. As a percentage of net revenues, the figure expanded 250 bps to 48.9% from the year-ago quarter’s level.
The non-GAAP operating margin was 28.9% in the third quarter, contracting 280 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash equivalents and short-term investments were $3.5 billion, up from $3.2 billion as of Jun 30, 2022.
Long-term debt was $6.579 billion at the end of the reported quarter, flat with the last reported quarter’s level.
EBAY generated $735 million of cash from operating activities in the third quarter, down from $577 million in the second quarter.
Its free cash flow stood at $633 million in the reported quarter.
eBay repurchased $301 million worth of shares and paid out dividends of $120 million in the reported quarter.
Guidance
For fourth-quarter 2022, eBay expects revenues of $2.42-$2.50 billion. On an FX-neutral basis, the year-over-year decline in revenues is anticipated to be 4-1%. The Zacks Consensus Estimate for revenues is pegged at $2.47 billion.
Non-GAAP earnings per share are anticipated between $1.03 and $1.09. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2022, EBAY revised its revenue guidance to $9.71-$9.79 billion, suggesting a decline of 4-3% on an FX-neutral basis from the number reported in 2021. Previously, eBay projected revenues between $9.6 billion and $9.9 billion. The Zacks Consensus Estimate for revenues is pegged at $9.71 billion.
eBay raised guidance for non-GAAP earnings per share from $3.95-$4.10 to $4.07-$4.13. The Zacks Consensus Estimate for the same is pegged at $4.04 per share.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are DICK’s Sporting Goods (DKS - Free Report) , Home Depot (HD - Free Report) and Ross Stores (ROST - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DICK’s is scheduled to release third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Get the latest research report on EBAY - FREE
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