eBay (EBAY - Free Report) is set to report fourth-quarter 2018 results on Jan 29.
The company beat the Zacks Consensus Estimate in two out of the trailing four quarters, delivering average positive surprise of 1.44%.
In third-quarter 2018, earnings of 56 cents per share beat the Zacks Consensus Estimate by a penny. Gross revenues of $2.65 billion jumped 6% year over year (up 6% on an Fx-neutral basis) and beat the Zacks Consensus Estimate by 0.12%.
For the fourth quarter, eBay expects revenues to grow 4-5% on an Fx-neutral basis to $2.85-$2.89 billion and non-GAAP earnings between 67-69 cents per share.
The Zacks Consensus Estimate for fourth-quarter earnings and revenues is pegged at 68 cents and $2.87 billion, respectively. We expect eBay to perform well on the back of strength in its marketplace’s active users and net transaction revenues.
Shares of eBay have lost 18.4% in the past year compared with the industry's decline of 10.7%.
Marketplace Active Buyers to Drive Growth
In the third quarter, eBay’s Marketplace active buyers increased 4% from the year-ago period to 177 million. We expect significant additions in the to-be-reported quarter as well. The Zacks Consensus Estimate for this metric is currently pegged at 178 million.
eBay’s accelerated Artificial Intelligence (AI) efforts through personalization, image search technology and customer support are expected to strengthen the Marketplace platform.
Moreover, the company has been giving more data to its marketplace sellers including price and restocking guidance, as well as more insight into inventory such as demand signals for the right products, price, and timing.
Notably, eBay offers a local feature, which allows a customer to buy something online and then pick it up at a local store when convenient. This lowers shipping costs and helps boost growth of the Marketplace business.
eBay Inc. Price and EPS Surprise