Going once, going twice ... eBay's
After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over eBay's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 26,000 investors for their views on well over 4,000 companies, eBay among them. Here's what Fools have to say about the company.
Up or down?
More than 2,000 investors have submitted ratings on the company. The verdict: Don't buy it now. If you really want it, swoop in when a low price presents itself.
Overall, 85% of CAPS investors who've rated the stock think the company will outperform the market. And when you drill down for the opinions of our very best investors in that pool -- the CAPS All-Stars -- endorsements rise to an even more impressive 95%. Regardless, there's sufficient doubt about the company to earn eBay just three out of five possible stars under the CAPS rating system.
Objectively unimpressive, eBay does rank among the most-loved companies when compared to its CAPS-peer "dot-coms." (Talk about damning with faint praise, though. The best these guys can muster is three stars?)
|
Internet Information Provider |
CAPS Rating (out of five) |
|---|---|
|
eBay |
*** |
|
Blue Nile |
*** |
|
Priceline.com |
*** |
|
Digital River |
** |
|
Drugstore.com |
** |
|
Amazon.com |
* |
|
Overstock.com |
* |
Wall Street vs. Main Street
It's not often you see this: When you ask the investors who supposedly know the most about investing -- professional analysts -- they favor eBay by precisely the same margins as do ordinary mortals like you and me. With 17 buy ratings to three sells, Wall Street gives eBay an 85% endorsement.
Yet if you examine the stock's performance over the last 52 weeks, you'll see that it has underperformed the market by approximately 20 percentage points.
Brass tacks
Talk is cheap. Judging from its plunging share price, few of these supposed eBay fans are putting their money where their mouths are. But just for kicks, let's listen in on the talk about eBay:
Bull pitch
The top bull pitch on CAPS takes a Foolishly unorthodox approach to endorsing eBay. No longer just an efficient market, it argues, eBay can profit from the subprime mortgage meltdown by becoming "the new pawnshop for the new financial crisis. Expect sales and profits to rise as a result of the meltdown in housing and tightening of credit." Well, knock me over with a feather -- I must admit I'd never thought about it that way.
Bear pitch
In contrast, the eBay bears voice complaints that feel as familiar as an old friend -- they've been voiced nearly as long as the company has been around: eBay's growth days are behind it. It overpaid for its latest acquisition (Skype this time, PayPal before that). It charges its customers too-high commissions and is driving its own business away.
Who said that?
To learn the identities of the wise Fools who penned these words, and explore the plethora of additional financial data we've put together on the company, just click here.
eBay, Amazon, and Priceline are Motley Fool Stock Advisor picks. You can find out why, and see which other stocks have made the cut, with a 30-day free trial of our flagship newsletter.
Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 138th out of more than 27,000 raters. Blue Nile is a Rule Breakers and Hidden Gems pick. The Fool has a disclosure policy.
