Global e-commerce leader eBay Inc. (EBAY – Get Rating) operates marketplace platforms that connect buyers and sellers worldwide. The company’s marketplace platform includes its online marketplace at ebay.com and the eBay suite of mobile apps.
Despite supply chain issues that plagued the market over the past year and other macroeconomic headwinds, the company managed to grow its revenues. The company also benefits from not carrying an inventory of its own and so does not face supply shortages or shipping expenses.
For a company such as EBAY that attracts willing and interested buyers, businesses see it as a strategic advertising platform. EBAY’s first-party advertising products delivered $285 million in revenue in the first quarter, with the total advertising offerings generating over $317 million in revenue.
However, the growth of e-commerce is slowing down. The sales growth of retail e-commerce is projected to increase by 8.9% this year, which is a significant decrease compared to the double-digit growth rates of 2020 and 2021.
According to a survey, e-commerce sales were down 1.2% last month on a year-over-year basis and 1.8% off for the first six months of this year compared to the first half of 2022.
Moreover, retail sales fell 1% year-over-year last month as rising interest rates bit into consumers’ budgets. Sales could remain under pressure as rates are expected to go up again in August.
EBAY’s stock has gained 12.8% over the past month and 26.5% over the past nine months to close its last trading session at $48.94.
Here are some factors that could influence EBAY’s performance in the upcoming months
Mixed Financials
EBAY’s total revenue for the fiscal first quarter ended March 31, 2023, increased 1.1% year-over-year to $2.51 billion. The company’s gross profit increased marginally year-over-year to $1.81 billion. Its non-GAAP EPS came in at $1.11, representing a 5.7% increase from the year-ago quarter.
However, EBAY’s non-GAAP operating income declined 7.6% year-over-year to $744 million, while its non-GAAP net income from continuing operations declined 4% year-over-year to $600 million.
