eBay: Expectations Rising Heading Into Wednesday Earnings

Expectations are rising for eBay’s (EBAY) Q1 results heading into its announcement after the close on Wednesday. This morning, a number of analysts weighed in on their expectations for the quarter, with most anticipating a strong report. This trend has been building for several weeks; eBay shares have gained more than 22% since mid-March. Given rising expectations, you have to wonder if the stock can continue the rally unless the company really does blow away expectations.

Here’s a rundown on some of today’s commentary.

• Tim Boyd, American Technology Research: He expects a beat-and-raise quarter. Boyd sees Q1 revenue of $2.1 billion and EPS of 40 cents versus the Street at $2.06 billion and 39 cents. He sees gross merchandise value increasing 15% year-over-year, up from 12% in Q4. He says checks find an acceleration in U.S. GMV, which is says is “key.” On the other hand, he warns that for the stock to extend its recent rally, you will need to see a beat and raise quarter; re-acceleration in GMV growth; and a sequential rise in active users.
• Aaron Kessler, Piper Jaffray: Kessler today raised his Q1 estimates to $2.16 billion and 42 cents from $2.06 billion and 40 cents. His ‘08 EPS estimate goes to $1.75 from $1.67. For ‘09, he’s now at $2, up from $1.88. He also raised his price target to $40 from $34. Kessler raised his estimate on growth in the core eBay marketplace to 17% in Q1, from 11.5%. He also raised his expectations for PayPal to $526 million from $511 million. His Skype estimate rises to $126 million from $119 million.
• Youssef Squali, Jefferies: He expects $2.11 million in revenue and 39 cents for Q1. “We expect eBay to report solid Q1 results, benefiting from robust listings growth on Marketplaces and continued strength in payments and other non-GMV businesses,” he writes.
• Jack Murphy, William Blair: “We expect results at least in line with consensus expectations.”

At Monday market close, eBay was up 50 cents, 1.52%, at $31.37. There was continued upward activity after hours.

Comments

[CEP]

Having spent the last few weeks in the ebay forum seller central I'm having a very hard time buying into some of these estimates. Many users both buyers and sellers have left. No one seems to be selling much. The constant glitches as well as the new best match have buyers not being able to find what they are looking for. If the report shows these estimates are correct I'd still only believe it if the numbers were broken apart between ebay and paypal.