eBay (EBAY) was a nice surprise early today for the markets. Here is a report of its numbers:
- eBay's Q4 earnings beat expectations despite net profit falling to $751M from $1.98B, when eBay sold Skype.
- EPS coming in at $0.57 and revenue climbing 18% to $3.99B.
- eBay provided Q1 guidance that was below consensus but 2013 forecasts that were in line.
- The company enjoyed a strong performance from its mobile offerings as its marketplace payment volume reached $13B last year, topping the firm's $10B projection.
- PayPal also performed well, with sales rising 24%.
What can we learn from eBay's report? I am not sure if I would say we can learn something new, but I can say that the confirmation that things are going mobile so consumers and businesses take note!
Mobile Devices Continue to Propel eBay!
There is little doubt that the combination of internet shopping mall and digital payment service is helping eBay rake in the dough as it surpassed analyst's projections for the fourth quarter. As online shopping continues to grow, so does eBay's potential for revenue and Wall Street loves it. Like all smart global giants, eBay continues to evolve and adapt to the mobile market trend as it renovates its online store and payment site-PayPal.
Its genesis into the mobile market has been nothing but amazing and propelled the value of the stock by 68% last year. Consumers have downloaded eBay's applications to 120 million mobile devices worldwide and it has been forecasted that eBay's marketplace division will generate $20B in mobile transactions in 2013.
The transition has also brought new, younger users. This is a differing demography that tends to buy different things and they may be using eBay for the first time. Not only is a new age group trying the company, but the mobile market is also opening up new geographic markets with ease. eBay has moved into Brazil and Russia this way.
CEO John Donahue has done an amazing job in the last two years, taking over for Meg Whitman who is now CEO at Hewlett Packard. He orchestrated and has overseen the transition from online auctions to the mobile market. Auctions used to be the company's revenue foundation but mobile purchases are quickly replacing it.
PayPal continues to impress
PayPal continues to generate growth for eBay. It added 5 million new users in the fourth quarter for the biggest growth in the last 5 years. There are 123M account holders who accumulated 700 million payments PayPal processed last quarter. eBay is now taking PayPal offline and will be accepted at 23 major retailers including Barnes & Noble, RadioShack and Home Depot to name a few. It is also going to start accepting the discover card. 2012 brought 10% of all transactions on the site from a mobile source.
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Technically Speaking
There is no doubt that the stock remains bullish and the present earnings for the fourth quarter will keep the stock moving up. How strong is the present move? Even the lows it has recorded are not very bearish. In the RSI indicator, the lows have barely moved into the territory below the '50' line. I can observe the same thing in the MACD. The MA's continue to flow up and the lows continue to get higher. The stock is fairly volatile though as it continues to move between the upper and lower Bollinger Bands. But it I steady. It will pullback like it always does, but just not yet.
Into 2013, I am a firm believer that eBay will continue its journey upward. I am not alone in thinking this. A few analysts are bullish on the stock like Edward Jones and Credit Suisse recently raised its price target for the stock. I believe the company would make a good growth stock through 2013 as the mobile business continue to evolve and expand.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
