eBay (EBAY) earnings release review for the 2nd quarter of their 2021 fiscal year
Category: eBay (EBAY)
Date: 16 August 2021 Stock Price of eBay: $75.07 Market Capital of eBay: $51.14 billion We take a look at the 2nd quarter 2021 earnings report of eBay one of the world's largest online classifieds platforms. For the quarter the group reported revenue of $2.7 billion and net income of $294 million.
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Today I am pleased to announce another strong quarter. In Q2, on an apples-to-apples basis, all key business metrics met or exceeded expectations and revenue growth was driven by the acceleration in our payments migration and growth in advertising -Jamie Iannone, Chief Executive Officer at eBay "
About eBay Inc
eBay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May 1996. In April 1998, we reincorporated in Delaware, and in September 1998, we completed the initial public offering of our common stock. Our principal executive offices are located at 2025 Hamilton Avenue, San Jose, California 95125, and our telephone number is (408) 376-7008.
When we refer to “eBay Inc.” we mean our Marketplace, StubHub and Classifieds platforms. On November 24, 2019, we entered into a definitive agreement for eBay to sell StubHub to viagogo, with closing of the transaction expected to occur in the first quarter of 2020. eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere.
Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts, including off-platform businesses in Korea, Japan and Turkey and the eBay suite of mobile apps. We believe that these are among the world’s largest and most vibrant marketplaces for discovering great value and unique selection. StubHub platforms include the online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. These platforms connect fans with their favorite sporting events, shows and artists and enable them to buy and sell millions of tickets annually, whenever and wherever they want.
Our Classifieds platforms include a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. Offering online classifieds around the world, these platforms help people find what they are looking for in their local communities. Our platforms are accessible through a traditional online experience (e.g., desktop and laptop computers), mobile devices (e.g., smartphones and tablets) and our application programming interfaces or APIs (platform access for third party software developers). Our multi-screen approach offers downloadable, easy-to-use applications for iOS and Android mobile devices that allow access to ebay.com and some of our other websites and vertical shopping experiences. Our platform is increasingly based on open source technologies that provide industry-standard ways for software developers and merchants to access our APIs and develop software and solutions for commerce. In 2019, we launched new API capabilities to give thirdparty developers access to eBay programs like managed payments
When we refer to “eBay Inc.” we mean our Marketplace, StubHub and Classifieds platforms. On November 24, 2019, we entered into a definitive agreement for eBay to sell StubHub to viagogo, with closing of the transaction expected to occur in the first quarter of 2020. eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere.
Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts, including off-platform businesses in Korea, Japan and Turkey and the eBay suite of mobile apps. We believe that these are among the world’s largest and most vibrant marketplaces for discovering great value and unique selection. StubHub platforms include the online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. These platforms connect fans with their favorite sporting events, shows and artists and enable them to buy and sell millions of tickets annually, whenever and wherever they want.
Our Classifieds platforms include a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. Offering online classifieds around the world, these platforms help people find what they are looking for in their local communities. Our platforms are accessible through a traditional online experience (e.g., desktop and laptop computers), mobile devices (e.g., smartphones and tablets) and our application programming interfaces or APIs (platform access for third party software developers). Our multi-screen approach offers downloadable, easy-to-use applications for iOS and Android mobile devices that allow access to ebay.com and some of our other websites and vertical shopping experiences. Our platform is increasingly based on open source technologies that provide industry-standard ways for software developers and merchants to access our APIs and develop software and solutions for commerce. In 2019, we launched new API capabilities to give thirdparty developers access to eBay programs like managed payments
Overview of eBay's 2nd quarter 2021 earnings
- eBay Korea business reported as discontinued operations
- Revenue of $2.7 billion, up 14% on an as-reported basis and up 11% on an FX-Neutral basis
- Gross Merchandise Volume of $22.1 billion, down 7% on an as-reported basis and down 11% on an FX-Neutral basis
- GAAP and Non-GAAP EPS per diluted share of $0.43 and $0.99, respectively, on a continuing operations basis
- GAAP and Non-GAAP operating margin of 27.4% and 32.8%, respectively • Returned $1.6 billion to shareholders in Q2, including $1.5 billion of share repurchases and $121 million paid in cash dividends
- Announced an agreement to sell 80.01% of eBay Korea business to Emart for approximately $3 billion
- Completed the sale of the Classifieds business to Adevinta on June 24th for $13.3 billion, including $2.5 billion in cash and approximately 540 million shares of Adevinta stock (44% ownership)
- Entered into an agreement to sell approximately 135 million shares of eBay's Adevinta stock to Permira for over $2.4 billion, reducing our ownership of Adevinta to 33%
- Board of Directors expands share repurchase authorization by an additional $3 billion
eBay's management commentary on their 2nd quarter 2020 earnings report
San Jose, California, August 11, 2021 - eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its second quarter ended June 30, 2021.
“Today I am pleased to announce another strong quarter. In Q2, on an apples-to-apples basis, all key business metrics met or exceeded expectations and revenue growth was driven by the acceleration in our payments migration and growth in advertising,” said Jamie Iannone, Chief Executive Officer at eBay. “During the quarter, we hit several important milestones in our ongoing transformation, including the transition of eBay’s Classifieds business - a deal that has already delivered exceptional shareholder value - and the announcement of the sale of our Korean business. We are simplifying our portfolio and growing our core while delivering significant shareholder value.
“We remain relentlessly focused on accelerating our product innovation by harnessing the power of next-gen technology and creating a more seamless experience for sellers,” continued Iannone. “We are delivering innovative category experiences for buyers and quickly evolving in our pursuit to be the best global marketplace to sell and buy.”
“Today I am pleased to announce another strong quarter. In Q2, on an apples-to-apples basis, all key business metrics met or exceeded expectations and revenue growth was driven by the acceleration in our payments migration and growth in advertising,” said Jamie Iannone, Chief Executive Officer at eBay. “During the quarter, we hit several important milestones in our ongoing transformation, including the transition of eBay’s Classifieds business - a deal that has already delivered exceptional shareholder value - and the announcement of the sale of our Korean business. We are simplifying our portfolio and growing our core while delivering significant shareholder value.
“We remain relentlessly focused on accelerating our product innovation by harnessing the power of next-gen technology and creating a more seamless experience for sellers,” continued Iannone. “We are delivering innovative category experiences for buyers and quickly evolving in our pursuit to be the best global marketplace to sell and buy.”
Related Topics
Business Outlook
eBay is providing the following guidance for continuing operations for Q3 2021. In billions, except per share data and percentages
Q3 2021 Guidance
Dividend Declaration
• eBay's Board of Directors has declared a cash dividend of $0.18 per share of the company's common stock. The dividend is payable on September 17, 2021 to stockholders of record as of September 1, 2021.
eBay is providing the following guidance for continuing operations for Q3 2021. In billions, except per share data and percentages
Q3 2021 Guidance
- Revenue $2.42 billion - $2.47 billion
- Organic FX-Neutral Y/Y Growth 6 - 8%
- Diluted GAAP EPS $0.64 - $0.68
- Diluted Non-GAAP EPS $0.86 - $0.90
Dividend Declaration
• eBay's Board of Directors has declared a cash dividend of $0.18 per share of the company's common stock. The dividend is payable on September 17, 2021 to stockholders of record as of September 1, 2021.
eBay (EBAY) stock price chart over the last 5 years
The image below shows the stock price history of eBay (EBAY) for the last 5 years. And its been a good time for eBay stockholders Over the last 5 years the stock of eBay increased by 130.7%. No investor would say no to those type of returns.
The stock of eBay is currently trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of eBay's stock is positive at this point
The stock of eBay is currently trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of eBay's stock is positive at this point
eBay (EBAY) latest stock valuation
So based on the 2nd quarter 2021 earnings report of eBay (EBAY) what do we value eBay stock at? Based on the earnings reported we value the stock of eBay at $68 a stock.
We therefore feel that the stock of eBay is overvalued and a good price long term fundamental or value investors should look to enter the stock at is at least 10% below our target price (full value price) which in this case is $68. We therefore believe a good entry point into eBay (EABY) stock would be around $61.20 or below.
We expect the stock of eBay to pull back from its current level to levels closer to our target price in coming weeks and months.
We therefore feel that the stock of eBay is overvalued and a good price long term fundamental or value investors should look to enter the stock at is at least 10% below our target price (full value price) which in this case is $68. We therefore believe a good entry point into eBay (EABY) stock would be around $61.20 or below.
We expect the stock of eBay to pull back from its current level to levels closer to our target price in coming weeks and months.
Next earnings release of eBay (EBAY)
It is expected that Dillards will release their 3rd quarter 2021 earnings report in mid November 2021