eBay (NASDAQ:EBAY) yesterday held its annual analyst conference and reiterated that the growth that's made it the 11th largest U.S. retailer and the largest online commerce site will continue.

The company stood by 2004 projections that call for $2.9 billion in revenue and $0.98 per share in pro forma profits, and reaffirmed its 2005 goal of eBay-only revenue hitting $3 billion. Including PayPal, analysts project $3.8 billion in total 2005 revenue, while eBay models $1 billion in operating cash flow that year.

Management continues to focus on international growth -- now operating in some 20 countries, Germany being the largest -- and on eBay Motors (cars and related sales). eBay also remains intent on rolling out new services to make it easier to buy and sell, introducing new product categories, growing PayPal, and marketing itself online and on TV.

For 2003, the company did not touch recent estimates of $2.1 billion in revenue and as much as $0.72 per share in pro forma earnings ($0.65 on a GAAP basis). It projects $0.21 in pro forma fourth-quarter profits.

Consensus analyst estimates are predicting $0.24 in quarter four, and $0.75 for the year, both higher than eBay's own numbers, giving the company a hurdle to leap. Analysts do the same next year, projecting $1.03 per share to eBay's guidance of $0.98.

In these cases, eBay is a victim of its own success. Exceeding guidance during the past three years has increased the expectation -- and pressure -- to keep doing the same. Perhaps in this game of cat and mouse, management is offering slightly more conservative guidance these days, adjusting for the fact that analysts will ratchet it higher. Silly, but in an odd way this would be a logical safeguard against disappointment.

The stock can't afford to deflate investor enthusiasm. eBay has about $475 million in trailing free cash flow (not excluding tax benefits from stock options). At $57 per share, the company's market value is $36.7 billion. Backing out $1.1 billion in cash and equivalents, eBay's enterprise value is $35.6 billion, or 75 times free cash flow. The stock trades at 58 times next year's pro forma earnings estimate, while earnings should grow about 37%.

The premium price stands because free cash flow keeps expanding and sales growth has been as impressive as this:

    1998   $  86M1999     224 2000     4312001     7482002   1,2142003E  2,1002004E  2,9002005E  3,800

As with its Internet brethren -- Amazon (NASDAQ:AMZN), Yahoo (NASDAQ:YHOO), and newcomer Netflix (NASDAQ:NFLX) -- the doubling stock prices of 2003 demand strong financial results in 2004 -- arguably stronger than estimates.

Jeff has stakes in eBay and Netflix, well-done and medium-rare, respectively.