The stock prices of both eBay (NASDAQ:EBAY) and Pinterest (NYSE:PINS) experienced noticeable declines following their first-quarter earnings reports released in late April. It's likely that the e-commerce companies lost some favor with investors over concerns about consumers returning to offline shopping amid the receding pandemic.

What these investors may not be aware of is that both of these companies that cater to online sellers have made changes to their businesses that could dramatically increase the likelihood of solid returns in the coming years, regardless of whether they have tailwinds from pandemic-related lockdowns.

1. eBay

Over the last few years, investors lost interest in eBay as high listing fees and a complicated platform led online sellers to turn to its competitors.

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That sense of slacking interest seemed to return following first-quarter earnings. Investors sold off amid a lackluster revenue forecast for the second quarter and the absence of any yearly projections.

Many e-commerce stocks have lost value lately as consumers have begun to shop more at brick-and-mortar stores. However, Grand View Research projects e-commerce will maintain a compound annual growth rate of 10% through 2028, indicating any near-term slowdown likely won't last.

More importantly for eBay, the return of Jamie Iannone to the company as CEO in early 2020 signaled a change of direction. Industry observers credit the former eBay executive with building successful platforms at Walmart in its Walmart eCommerce and Sam's Club segments.

Now, Iannone has made changes to eBay's site. As Iannone mentioned in the Q1 2021 earnings call, eBay has simplified the steps to post listings as well as added QR coding for more efficient delivery. eBay has also established its Managed Payments platform, a one-stop-shop that allows buyers to pay and sellers to receive payment on one site.

E-commerce has risen across the board, leading eBay to a 19% increase in revenue from year-ago levels for fiscal 2020. This is a dramatic shift for a company that experienced 1% revenue growth in 2019. Moreover, the increases continued as revenue surged 42% compared with the same quarter last year.

The higher revenue helped lead to $569 million in GAAP net income for the first quarter as well as $855 million in free cash flow for the period. That enabled eBay to return $414 million to shareholders, and debt levels of approximately $7 billion fell by about $800 million from year-ago levels.

eBay stock price surged by about 45% over the last 12 months. Still, with a P/E ratio of 15, it dramatically lags the valuations of other e-commerce giants such as Amazon and Walmart. While eBay may not offer the fastest growth in e-commerce, the consumer discretionary stock may well provide the most growth for the money.

EBAY Chart

EBAY data by YCharts

2. Pinterest

Originally a site designed for "pinning" the latest trends, Pinterest has become increasingly valuable in the e-commerce realm. The company claims about 478 million monthly active users (MAUs), and 80% of weekly Pinners, as it calls its users, discover a new brand on the site. Also, since 45% of its Pinners in the U.S. earn over $100,000 per year, it unites ideas with buyers with disposable income.

It also stands out by focusing on ideas rather than the social connections that bolster Facebook or Twitter. Since it focuses on concepts, the site can apply a user's inspiration to directly link merchants. In other words, if users find items they would like to buy, Pinterest can link them with merchants offering those products.

In 2020, this strategy helped revenue surge 48% from last year's levels to almost $1.7 billion. This growth accelerated in the most recent quarter as revenue climbed to $485 million, a 78% increase from the same quarter last year. In comparison, the cost of revenue rose around 34%, while operating expenses climbed by about 22%. This helped Pinterest cut its quarterly loss to $22 million, down from $141 million in the same quarter last year.

Despite the loss, Pinterest generated $269 million in free cash flow during the quarter. Since it now holds about $2.1 billion in liquidity, this cash allows it to cover expenses and invest further in the business.

Nonetheless, despite these cash flows and a Q2 projection of 105% revenue growth, Pinterest did not offer any full-year predictions for fiscal 2021. The expected resurgence of in-store shopping leaves Pinterest's revenue growth in a precarious state in the near term. Hence, Pinterest, like most of its peers, has not published forecasts beyond the upcoming quarter.

This has led to the stock price falling significantly following earnings. However, even with the drop, Pinterest's stock price has risen by almost 200% over the last 12 months. Although it now sells for around 19 times sales, it sells for much less than Shopify's sales multiple of 39.

PINS Chart

PINS data by YCharts

This could motivate some buyers to take advantage of Pinterest's post-earnings plunge. Although the near-term uncertainty may trouble many investors, Pinterest continues to invest in site improvements, advertiser engagement, and content. These upgrades and the strong user engagement should help Pinterest drive long-term profit increase from its core competency -- turning ideas into sales.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.