eBay Sentiment: In Neutral Ahead of Earnings

eBay (EBAY) is scheduled to release Q3 earnings this Wednesday, October 21st, after the market close.

Average analyst estimates for the online marketplace are $.37/share in EPS and $2.14 billion in revenue. Twenty-Five analysts track the stock with eight upward EPS revisions in the last 30 days and no downward EPS revisions in the last 30 days.

Last quarter, eBay beat average analysts expectations by $.01/share or 2.8%, $.37/share vs. $.36/share.

I always find this a tough period waiting to see if the company is going meet, exceed, or miss their earnings estimates. One thing of value that I have discovered is analyzing sentiment moves in a stock ahead of the company’s earnings release. In the case of eBay, I will use the piqqem sentiment index for eBay to see how sentiment has changed in the last quarter, for the months within that quarter, and from the end of the reporting quarter through today.

I’m looking for moves or changes that may foreshadow the earning release. (piqqem leverages the ‘wisdom of crowds’ by allowing its users to vote on the price direction of a stock and then applies its own propriety factors to calculate sentiment for a security. In their model, 0 is the lowest and 4 is the highest sentiment).

Source: Piqqem

The above chart shows eBay’s sentiment decreasing by 5% from the beginning of the quarter to today. The chart also shows that sentiment increased by 4% from the end of Q3 thru today. This last indicator has historically been the most accurate indicator regarding an earnings surprise, both upside and downside. On the Piqqem scale, eBay’s sentiment rating of 2.53 indicates moderate quality and this is considered a hold. Only eBay knows their actual results, but their current sentiment points to eBay delivering earnings in a narrow range around $.37/share on Wednesday.

Disclosure: No Positions

Comments

[Patricia013:]

Yeah....they're really busy right now trying to hide the decline among smoke and mirrors.....it will take analysts a few days to dig out the rot they have hidden deep within core. Every seller I know is reporting a terrible lack of sales and lack of traffic. If Ebay dares to show even a sliver of advancement - I'd like to know exactly where its coming from!

Oct 20 07:49 PM

[jay dee:]

Patricia,
Don't you know ebay has moved on ; they don't need us - we are just noisy old dinosaurs trying to sell neat,unique stuff the way we used to .
Pay pal is where it's at for ebay now - basically legal graft on any kind of transaction. Very easy to make money on !

Oct 21 01:28 AM

[Patricia013:]

Ebay only "thinks" its moving on. Instead it is digging itself into a hole of mediocrity! Up against Amazon it sticks out like a sore thumb. Ebay looks like a rank amateur against a sleek hard as steel opponent like Amazon. Donahoe feels he can get ahead on the ebay name alone. He has no idea how tarnished that name is now. So, instead of monopolizing its niche of the rare, unusual and vintage - Ebay has unwittingly handed that niche over to various other venues. No...they only "think" they've moved on. This holiday season will tell the true tale....and I feel it will be a sad one for ebay. Amazon continues to eat Ebay's lunch while stealing away the best sellers and buyers from it.

Oct 21 12:23 PM

[Philip Cohen:]

"Only eBay knows their actual results,..."

How true! I'm looking forward to "Noise" Donahoe's little song and dance routine this evening as he attempts to hide eBay's real results. I wonder if he will be doing his own comera work again?

In the meantime, some light reading for eBay "buyers":
www.auctionbytes.com/f...

Oct 21 04:44 PM