What to Watch When eBay Reports Next Week

FAN Editor

Ready your bids, tech investors: eBay (NASDAQ: EBAY) is set to announce first-quarter 2019 results next Tuesday, April 23, after the market closes. With shares of the online marketplace up around 25% so far this year, now’s the time to touch base and see exactly what we can expect when its next report hits the wires.

For perspective, eBay’s last quarterly update in late January offered plenty of material for investors to digest, from a freshly initiated $0.14-per-share dividend to a $4 billion increase in the company’s current stock-repurchase authorization, which will bring planned capital returns to $7 billion over the next two years.

Continue Reading Below

On eBay’s headline numbers

Those generous capital-returns initiatives helped offset any qualms the market might have had about eBay’s seemingly light revenue guidance last quarter.

For perspective, management’s current outlook calls for first-quarter revenue between $2.55 billion and $2.60 billion — the high end of which was around $60 million below consensus estimates at the time — which should translate to adjusted (non-GAAP) earnings of $0.62 to $0.64 per share.

On new strategic initiatives, appeasing activists

Management, for its part, explained that the company will focus this year on driving improvements to the eBay user experience, and on investing to seize longer-term growth opportunities in the advertising and payments spaces. Listen closely during this quarter’s call for specific color on eBay’s progress toward those ends.

Early last month — with input from multiple outspoken activist investors — eBay also announced a number of new strategic performance initiatives. These include an operational review to accelerate revenue and operating income growth, and a strategic review of its noncore StubHub and eBay Classifieds businesses.

EBay further announced it will add two new board members: Elliott Management’s Jesse Cohn, and Marvell Technology Group‘s CEO Matt Murphy. And perhaps unsurprisingly to stave off future proxy battles, it struck a “cooperation agreement” with affiliates of both Elliott Management and Starboard Value, through which each activist investor firm has agreed to certain standstill and voting provisions.

EBay CEO Devin Wenig explained in a press release:

Looking forward

Depending on the early impact of those initiatives, and any consequential deviance from eBay’s performance relative to its Q1 guidance, shareholders should also keep an eye on any adjustments to the company’s full-year targets. As it stands, the company most recently anticipated 2019 revenue to be between $10.7 billion and $10.9 billion (assuming modest organic growth of 1% to 3%), and adjusted earnings per share to be $2.62 to $2.68.

Shortly after eBay’s release next week, I’ll follow up with more discussion of its accomplishments over the past few months.

10 stocks we like better than eBayWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and eBay wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.

Free America Network Articles

Leave a Reply

Next Post

3 Smart Social Security Moves Anyone Can Make

If you’re not already receiving regular Social Security payments, you probably will be one day, and if you want to be smart about it by reaping as much as you can, don’t simply leave things up to chance. The income you’ll receive from Social Security isn’t set in stone — […]