Four Reasons To Buy eBay Now

The Street appears to be growing more optimistic that eBay’s (EBAY) first quarter results could beat expectations.

J.P. Morgan’s Imran Khan wrote today that based on analysis of both listings and revenue per listing, he is “comfortable” that the company is “tracking ahead of Street consensus” for the quarter of $1.71 billion in revenue and profits of 30 cents a share. He says quarter-to-date listings are tracking up 8% year-over-year, or 11% ex-China and Taiwan.

U.S. listings are up 2%, ex-Motors and Stores, but down 0.9% overall. Khan maintains his Overweight rating on the stock, asserting that “better than expected revenue growth and improving margins will lead to multiple expansion and relative stock price outperformance.”

Meanwhile, Scott Devitt, internet analyst at Stifel Nicolaus, this morning advised investors that there are four reasons investors should be buying the stock ahead of the company’s mid-April report on first quarter results:

Sees first quarter revenue in line on 13% listings growth and double-digit year-over-year revenue per listing trends.

PayPal unaffected by competitor initiatives - Google (GOOG) Checkout - in payments.

Skype working on several initiatives “that could be meaningful over time.” He singles out a feature that embeds into the browser and automatically changes any static phone number into a click-to-call, as well as a $29.95 per year plan for calls in the U.S. and Canada.

He thinks eBay could become more aggressive about buying back stock, and potential could “initiate a structured recapitalization.”

Today, eBay is up 24 cents at $31.98.

EBAY 1-yr chart

Comments

[Firemeg:]

Exactly where did he get the info that listings in the US were up? They were down at last report a week ago.
In a recent Auctionbytes survey of actual online sellers, use of Google Checkout was up 3% just since September, not bad for an infant offering.
Skype is going nowhere, anyone who thinks otherwise is delusional. They will never make their money back.

Some reasons not to buy:
1) Vladuz hackings
2) Millions of scam listings
3) Unhappy customer base of SMI
4) Unhappy worldwide base over FB 2.0
5) New listings are down to 12,000,000
6) TOM buying back eBay shares in China
7) Page views are at a low not seen since 2001 (maybe earlier, Alexa only goes back to fall 2001)
8) Page rank is down
9) Site reach is down (#7, 8, & 9 all occurring now, when they should be up considering ebay spent quite a bit of money on new features to draw views - wiki, blogs, chat...etc.)
10) Prosperpoint.com breach
11) ebay Inc. shown in study to own the top 2 sites in the world in amount of scams (paypal and eBay.com)
12) shares already fallen by a couple of dollars
13) Question of whether eBay violated California law by not notifying customers of personal financial info that was posted to the discussion boards.
14)Numerous scam-in-a-box phishing software programs available widely for sale that allow anyone to start scamming like a pro in less than 30 minutes.
15) Less than stellar performance of Skype. Anyone who thinks eBay will break even in that deal is either insane or just plain dumb.
16) Continued search and indexing issues.

2007 Mar 19 07:26 PM