What Happened?
Shares of online marketplace eBay (NASDAQ:EBAY) fell 20.8% in the afternoon session after the company reported third-quarter earnings and provided revenue guidance for the next quarter, which missed analysts' expectations. In addition, its EBITDA fell short of Wall Street's estimates. Overall, this quarter could have been better.
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What The Market Is Telling Us
eBay’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. Moves this big are rare for eBay and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 9.5% on the news that the company reported first quarter results. However, revenue growth was quite weak. Notably, revenue in the US fell below expectations, partly driven by unfavourable weather conditions. Adding to the bad news is the fact that both the company's revenue and EPS guidance for next quarter missed analysts' expectations. The company called out a challenging macro environment with FX volatility remaining a headwind. On the other hand, the results were fine, with revenue and EPS exceeding expectations. Overall, it was a challenging quarter for eBay.
eBay is up 29.6% since the beginning of the year, but at $56.87 per share, it is still trading 15.3% below its 52-week high of $67.17 from October 2024. Investors who bought $1,000 worth of eBay’s shares 5 years ago would now be looking at an investment worth $1,613.
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