In 2021, e-commerce businesses experienced a boom period. It changes. eBay’s stock forecast is grim first quarter results for 2022. However, it finds itself in a similar situation to many other online retailers. As the pandemic ends, the pace of online shopping also decreases. Global supply chain disruptions continue. But it affects other e-commerce businesses more than eBay (Nasdaq:EBAY). However, eBay executives expect results to improve by the end of the year.
eBay Stock Forecast and History
Founded in 1995 in San Jose, California, eBay currently connects buyers and sellers in 190 marketplaces around the world. The company was an online pioneer”retrade», the purchase and sale of second-hand goods.
In 2002, eBay bought PayPal and became the company’s main payments provider. Additionally, in 2015 eBay completed the divestiture of PayPal and its former payments provider became an independent company. And, in 2005, the company acquired Skype, which it sold to Microsoft in 2011 for $8.5 billion. Other companies acquired and sold by eBay include StubHub and Flipkart. Additionally, in 2020 eBay sold its eBay classifieds to Advinta in a $9.2 billion deal.
In 2019, eBay started paying dividends. For 2022, it pays a annual dividend of $0.88 with a dividend yield of 1.6%.
eBay buyer decline
In the fourth quarter of 2021, eBay announced 147 million buyers global. However, the number of annual active buyers on eBay overall decreased by 9%.
During the same period, its gross merchandise volume (GMV) was $20.7 billion, with revenue of $2.6 billion. Of this amount, 52% of sales came from international activities. Vendors numbered 17 million. Of its GMV, $12.8 billion came from mobile volume.
Keep reading for more information on eBay stock forecasts.
New fee model
eBay makes money by charging fees to sellers through transactions. There are no fees for buyers. The company recently introduced a new fee model. As of March 1, 2022, the final value store fee for in-store sellers increased by 0.3%, from 11.7% to 12%. Final value commissions for non-store sellers increased by 0.35% in most categories. For example, this represents an increase from 12.55% to 12.9%.
Additionally, eBay has increased its $0.50 caption listing fee on items with a “Buy Now” or “Start Bid” price up to $150. This means auction listings are now $1.50 and fixed price listings are $2.
eBay’s long-term strategy
On March 10, 2022, eBay held its first Investor Day under the leadership of CEO Jamie Iannone. According to Iannone, “We are building an eBay for the future by doubling down on what we do best, connecting sellers and buyers of non-new seasonal products. We see incredibly compelling growth potential in this market and believe it “is our opportunity to win by refining our focus and continuing to create value through a technology reimagining of eBay. Further, he added that they have the right team and the right vision to achieve those goals and continue to restore shareholder value. Iannone touted a “reimagining” of eBay.
For fiscal year 2022, eBay’s stock market forecast calls for a decline in its GMV between 5% and 8%. Revenue is expected to increase by 0% to 3%. Its diluted non-GAAP earnings per share (EPS) is between $4.20 and $4.40.
In fiscal year 2023, eBay’s stock market forecast predicts that its GMV will increase between 3% and 4%. For fiscal year 2024, an increase in GMV of approximately 5% is expected. The revenue outlook for fiscal 2023 is a 5% gain, with a 7% to 8% gain for fiscal 2024. In addition, non-GAAP diluted EPS for fiscal 2023 increases by approximately 10 % and for the 2024 financial year by 15%.
The eBay Vault
eBay is the largest trading platform for collectibles and trading cards. The company plans to launch its eBay Vault in the second quarter of 2022. Additionally, this 31,000 square foot secure storage facility and digital marketplace lets customers know their valuables are safe. They can then resell them instantly, without needing to authenticate, package or ship the item again. Over the next few years, eBay expects the vault to hold $3 billion worth of valuables. This will make it one of the largest stores of non-government assets on the planet.
eBay Digital Wallet
Another new release for Q2 2022 is eBay’s premiere digital wallet. Sellers can use this digital wallet to make further purchases from sales proceeds or pay seller fees. Additionally, the company has explored but not committed to the possibility of crypto payments with its wallet.
eBay Stock Forecast Considerations
Although eBay ranks third among online retailers, after Amazon and Walmart, its business model does not rely on warehouses and supply chains like these behemoths do. Although eBay’s volume is huge, it does not sell its own products. He doesn’t have to spend money on inventory or fulfillment centers, except for eBay Vault. When analyzing eBay stock forecasts and predictions, keep in mind that Millennials and Gen Z particularly value the environmental impacts of buying and selling used items.
Jane Meggitt specializes in writing about personal finance. In addition to investing and planning for retirement, she writes about insurance, real estate, credit cards, estate planning and more. His work has appeared in dozens of publications, including Financial Advisor, Zack’s, SF Gate and Investor Junkie. A graduate of New York University, Jane lives on a small farm in New Jersey’s horse country.