eBay Shares Drop After Weak Guidance, But Analysts Say Turnaround is on the Horizon

    Author Caroline HarrisPosted on Categories Retail, Consumer, NASDAQTags , , , , , , , , , , , , , , , , , , , , ,
    eBay shares

    Interested in the retail sector? If so, you might want to pay close attention to the following: On Thursday, eBay shares (NASDAQ:$EBAY) dropped 3% after the e-commerce company gave a soft outlook for the fourth quarter and for the full year. However, there are a few analysts who remain hopeful that the San Jose-based company is in the early stages of a period of acceleration.

    Here’s what we know!

    eBay forecasts Q4 revenue to be in the range of $2.58 billion and $2.62 billion. This compares to a FactSet consensus of $2.60 billion. Earnings are expected to come in around 40 to 45 cents per share and adjusted earnings per share are forecast in the range of 57 to 59 cents. As a point of comparison, the FactSet estimate is 59 cents.

    In regards to the full-year revenue outlook, this is thought to come in between the range of $9.53 billion and $9.57 billion. Additionally, earnings per share guidance is forecast to come in around $1.85 to $1.90 and the adjusted earnings per share is in the range of $1.99 to $2.01. As for FactSet, the consensus for revenue is $9.54 billion and earnings per share of $2.01.

    “We believe eBay’s focus on high-inventory resellers, a shift away from out of season product sales and a renewed focus on user interaction through improved search and category-specific redesigns should lead to long-term revenue growth,” Benchmark analysts wrote in a note to clients. “We suspect our estimate for 65% year-over-year growth in revenue in 2018 could prove conservative but acknowledge the recovery will take time, especially in the face of continued FX headwinds and a carefully planned overhaul of the site to support structured data.”

    Regardless of the soft outlook, there are analysts who believe that, despite the challenges, a turnaround for eBay as a whole is likely on the horizon.

    “Arguably, a broader exposure of the enhanced experience supported by an aggressive marketing initiative should contribute to faster gross merchandise volume and revenue growth over time, but this outcome has taken longer than we expected,” SunTrust Robinson Humphrey wrote in a note.

    Featured Image: depositphotos/360ber

    Author Caroline Harris
    About the author: Caroline Harris is a third-year student at Capilano University in North Vancouver, Canada. Having already completed an Associates Degree in Psychology, Caroline is now finishing her Bachelor's degree in Communications. In preparation for working in the advertisement sector, Caroline is writing financial content and analysis. On a daily basis, Caroline works on articles regarding the following topics: finance, cryptocurrency, technology, and politics.