A Maturing eBay Earnings Story, at 20-Times Earnings

eBay Inc. (NASDAQ: EBAY) investors have a lot to digest today after the online auction and marketplaces giant reported earnings. eBay's earnings in the third quarter came to $718 million, or $0.55 per share outside of items, and revenue rose to $3.4 billion from $3 billion a year ago. Thomson Reuters was calling for earnings of $0.54 per share and $3.41 billion in sales.

For its fourth quarter, eBay's guidance came to $0.66 to $0.69 EPS on revenue of $3.85 billion to $4 billion. Thomson Reuters has estimates of $0.68 EPS and $3.94 billion in revenue. Today's results and its guidance are in-line with estimates enough that this offers investors very little expectation for a huge surprise one way or the other.

eBay shares closed down 4-cents at $48.20 on the day. Unfortunately, that is 20.5-times the $2.34 per share earnings consensus from Thomson Reuters. That seems like too high of an earnings multiple on the surface, but that is for 15% growth to earnings and 20% growth in revenue.

eBay shares are down 0.4% at $48.00 in the after-hours session and the 52-week trading range is $28.15 to $50.65.

JON C. OGG


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