Please ensure Javascript is enabled for purposes of website accessibility

Why eBay Inc. Stock Popped Today

By Steve Symington - Feb 1, 2018 at 2:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-commerce giant followed a fantastic holiday quarter with strong forward guidance. Here's what investors need to know.

What happened

Shares of eBay Inc. (EBAY -2.83%) were up 15.1% as of 1:15 p.m. EST Thursday after the e-commerce leader announced strong fourth-quarter 2017 results.

The company's revenue during the holiday quarter climbed 9.1% year over year (7% at constant currency) to $2.613 billion, which translated to 9.3% growth in adjusted earnings per share to $0.59. Both figures compared favorably to eBay's guidance provided in October for revenue between $2.58 billion and $2.62 billion, and adjusted earnings per share ranging from $0.57 to $0.59.

eBay office with colorful company sign in front

IMAGE SOURCE: EBAY.

So what

eBay's strength was broad-based, with active buyers across its platforms climbing 5% year over year to 170 million. Marketplace gross merchandise volume (GMV) increased 9% to $23 billion, resulting in an 8% increase in revenue to $2.1 billion. StubHub's GMV fared even better, climbing 16% to $1.4 billion, with revenue up 10% to $307 million. And eBay's classifieds platform generated revenue of $244 million, up 21% from the same year-ago period.

If that wasn't enough, eBay also authorized a $6 billion increase to its stock-repurchase program with no expiration, bringing its total repurchase authorization to $7.7 billion.

Now what

CEO Devin Wenig noted this was eBay's fifth straight quarter of volume acceleration in the U.S., and predicted further acceleration in the coming year as the company continues to implement its strategy.

eBay expects full-year revenue for 2018 to arrive between $10.9 billion and $11.1 billion, representing currency-neutral growth of 7% to 9%, while full-year adjusted earnings per share should be in the range of $2.25 to $2.30. While we don't pay close attention to Wall Street's demands, both ranges were well ahead of consensus estimates that called for revenue of $10.28 billion and earnings of $2.23 per share.

All things considered, there was nothing not to like about this straightforward beat-and-raise report. And investors have every right to celebrate as eBay stock sits at an all-time high right now.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

eBay Inc. Stock Quote
eBay Inc.
EBAY
$44.38 (-2.83%) $-1.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.