eBay stock price forecast ahead of Q2 earnings

The eBay (NASDAQ: EBAY) stock price jumped by more than 3% as investors prepared for the company’s earnings. The stock rose to $67.30, which was almost 10% below its highest level this year.

eBay earnings preview

eBay, the giant e-commerce company valued at more than $44 billion, will publish its quarterly results on Wednesday after the markets close. 

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Data compiled by SeekingAlpha shows that the company’s revenue retreated from $3 billion in Q1 to more than $2.86 billion. The earnings per share are expected to drop from $1.09 in Q1 to $0.95. 

Still, there is a high probability that the company will publish stronger numbers than expected. For one, eBay has a long track record of beating consensus estimates. It has performed better than estimates in all quarters sinceQ4 of 2018. 

In addition, many companies have published stronger quarterly results. According to FactSet, 87% of the 89% of all S&P companies that have published their results, have beaten analysts forecasts. 

Still, analysts will be focused on the company’s growth and forward guidance. In Q1, the firm’s Gross Merchandise Value (GMV) rose by 24% while revenue rose by 38%. This growth was mostly drive by its payments and advertising business.

Most importantly, the company managed to add the number of sellers and buyers. Active sellers rose to more than 20 million while buyers rose to 187 million. This is notable since eBay makes money from both sellers and buyers. Promoted listings brought in more than $224 million as more than 1.3 million sellers used the features. 

So, is the eBay stock a buy or sell? Analysts are generally bullish on eBay. Data compiled by Yahoo Finance shows that most analysts have a hold rating on the company. They are followed by those with a buy rating. Analysts at Wedbush and Susquehanna believe that the stock could rise to $80 while those at Cowen expect it to rise to $72.

eBay stock price forecast

The daily chart shows that the eBay stock price has been under pressure lately. The stock has fallen by about 10% from its highest point this year. It has also formed an ascending channel that is shown in black. The shares are currently between this channel. It is also slightly below the 25-day and 50-day moving averages.

Therefore, while the company will likely publish strong results, there is a possibility that it will retreat to retest the lower side of the channel at around $60. However, a move above $70 will invalidate the bearish thesis.

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