Will EBay Surprise Investors With Strong Q4 Earnings?

eBay Inc. (EBAY) Information Technology – Internet Software & Services | Reports January 27, After Market Closes

Key Takeaways

The Estimize community calls for EPS of $0.50 and revenue of $2.307 billion, right in line with the Wall Street consensus and corporate guidance

eBay is coming off one its worst quarters where EPS fell 37% and revenue fell 52%

The online auction house is transitioning away from its core business to a fixed pricing model similar to Amazon.

What are you expecting for EBAY? Get your estimate in here!

eBay, is scheduled to report fourth quarter 2015 earnings this Wednesday, after the markets close. One of the earliest adopter of online shopping, eBay is beginning to transition away from its traditional auction model towards a fixed price model replicating Amazon. The company is coming off one of its worst quarters, where EPS and revenue fell 37% and 52%, respectively. To battle stagnant growth, eBay is in the process of rolling out structured data initiatives to create new product experiences including richer browsing, improved pricing trend information and a better discovery interface. That said, Q4 earnings are expected to report modest decelerating growth in eBay’s key businesses. The Estimize community calls for EPS of $0.50 and revenue of $2.307 billion, right in line with the Wall Street consensus and corporate guidance. Compared to Q4 2014, this represents a projects YoY decline in EPS and revenue of44% and 52%, respectively. Over the course of 2015, eBay faced stiffer competition, currency headwinds and a separation from PayPal, all of which have put a damper on earnings.

After an abysmal third quarter, eBay is slowly losing ground among the top ecommerce websites. The online auction house continues to transition away from its core business in light of Amazon’s booming success. More recently, eBay has begun encouraging users to utilize a fixed price listing which is believed to help move products and boost sales. Fixed pricing is somewhat similar to Amazon’s model and had always been a secondary option to eBay’s core business. However, the competitive pressure from Amazon has forced eBay’s hand as the company is poised for a massive YoY contraction. Moreover, currency headwinds have contributed to declining growth as a strong dollar has negatively impacted worldwide operations. eBay remains in flux as it attempts to recover from its separation with online payment system PayPal. With stiff competition, currency headwinds, and the loss of PayPal working against it, eBay’s fourth quarter earnings are expected to underwhelm investors.