Shares of eBay (EBAY, Financial) experienced a decline of 6.44% following the release of the company's fourth-quarter 2024 financial results. This movement came after earlier fluctuations during the day as investors responded to the quarterly performance and guidance for the upcoming period.
In the fourth quarter of 2024, eBay reported a revenue of $2.6 billion, marking a modest 1% year-over-year increase, alongside a 4% rise in gross merchandise volume. For the full year, revenue reached $10.3 billion, reflecting a 2% increase compared to 2023. However, the company's guidance for the first quarter of 2025 forecasts a revenue growth of just 1%, which has not met some investor expectations especially with the new partnership allowing eBay listings on Facebook Marketplace through Meta Platforms.
Despite tepid revenue predictions, eBay (EBAY, Financial) projects substantial growth in earnings per share (EPS) for the next quarter. The company anticipates a Q1 2025 EPS of approximately $1, representing an increase of nearly 18% from $0.85 in Q1 of 2024, largely attributed to a reduced share count.
During the fourth quarter, eBay returned a significant $1 billion to its shareholders through share repurchases and dividends, further announcing a 7% hike in its quarterly dividend. This commitment underscores eBay's ongoing profitability and potential for enhancing shareholder value, particularly if strategic partnerships proceed to drive additional growth.
Analyzing eBay's metrics reveals a price-to-earnings (P/E) ratio of 16.21 and a price-to-book (P/B) ratio of 5.75, which are notable figures within its industry. The website GuruFocus has deemed eBay's stock as "Modestly Overvalued" according to their GF Value. eBay (EBAY, Financial) has shown a commendable 3-year revenue growth rate of 15.3%, which positions the company favorably within the retail - cyclical industry.
Furthermore, the company boasts a robust Altman Z-Score of 5.09 indicating strong financial stability. eBay (EBAY, Financial) also exhibits a Good Beneish M-Score of -2.32, suggesting it's unlikely to be a manipulator, and an impressive gross margin of 72.02%, which is a strong indicator of its profitability in the internet retail subindustry.
