EBay Stocks Plunge as Latest Outlook Disappoints

Shares of eBay Inc. plunged on Wednesday’s after-hours market after it issued disappointing earnings and revenue guidance.

The American e-commerce giant slashed 7.77% or 4.24 points to $50.35 per share.

This downturn followed a drop of 1.02% or 0.56 points to $54.59 per share in the regular trading stretch.

In line with this, the California-based company lost $2.70 billion in its valuation.

EBay warned investors that its first-quarter sales would miss estimates as customers return to pre-pandemic spending habits.

The firm expected sales in a range of $2.43 billion to $2.48 billion in the period ending in March.

This projection is way below the analysts’ consensus of $2.61 billion, representing a decline of 7.00% to 5.00% year-over-year.

Likewise, excluding some items, the business anticipated earnings to be between $1.01 to $1.05 per share. It missed the average market estimate of $1.08 per share.

Accordingly, eBay’s momentum on the onset of the pandemic eases as shoppers return to in-person browsing and buying.

EBay stocks have underperformed the market since the start of 2022, holding a drop of 18.28% or 12.21 points year-to-date.

At the same time, it plummeted 8.07% or 4.79 points from its performance last year.

The company now turns to its advertising and payments businesses to boost profits even if total spending on the site falls.

Moreover, the downbeat guidance overshadowed eBay’s better-than-expected earnings for the fourth quarter.

The firm posted earnings per share of $1.05, surpassing the expected $0.99 and previous $0.85 record.

Its Q4 revenue came in at $2.61 billion, which is in line with the market expectations. The figure is also higher than the $2.47 billion in the same period of the prior year.

EBay Registers Decline on Buyers Growth

Furthermore, eBay ended the fourth quarter with 147.00 million active buyers. This data is well short of the forecasted 156.00 million, representing a 9.00% fall from a year earlier.

Then, annual active sellers also edged down 8.00% to 17.00 million amid stiff competition and global supply chain disruptions.

Consequently, Q4 gross merchandise volume, the value of all goods sold on the site, skidded 10.00% to $20.73 billion.

Similarly, eBay’s biggest rival, Amazon.com Inc., has also forecasted disappointing first-quarter sales.

The heavyweight online retailer anticipated current quarter sales between $112.00 billion and $117.00 billion. This outlook missed the Wall Street consensus of $120.00 billion.

It also traded 0.77% or 22.25 points lower to $2,874.29 per share.

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