eBay is an online marketplace where buyers and sellers can interact digitally through listings of goods and services.
In its history, the business has grown from a localized user-based auction site to a global commercial behemoth.
The business has a strong presence in the electronic industry. Its auction operations have been a driving force in its expansion since the company’s 2015 split from PayPal.
In terms of market valuation, eBay Inc. appears to be inexpensive. Value buyers should consider purchasing this stock as it has a Value Score of B.
The business has reached a level of maturity where dividend payments have begun in 2019. eBay is a relatively low-risk company that gives shareholders exposure to the expanding online retail sector.
CWEB eBay Stock Chart
Merchandise listed on eBay is not owned by eBay. In addition, it forces customers and vendors to negotiate shipment and handling costs. In doing so, eBay can avoid making costly expenditures in distribution centers.
Instead, eBay puts money into its marketplace, which connects buyers and vendors. There is a fee for using eBay. The result has been an increase in eBay’s EPS at a compound yearly rate of 23.6% over the past decade.
In addition, eBay adjusted its company in a few key ways, allowing it to better monetize its trades. From the fourth quarter of 2020 to the first quarter of 2022, eBay’s take rate (the proportion of GMV that it retains as profit) rose from 10% to 12.1%. That implies a larger share of online purchases will be made through the eBay marketplace.
There’s a good chance that the increased take rate that eBay is experiencing will not scare off its customers. Another online marketplace with a comparable business strategy, Etsy, has a take rate of 17%. According to Etsy’s rate, eBay could potentially increase its take rate in the future.
Etsy is currently trading at $133.50 and eBay is trading currently at $45. If you compare both companies eBay can easily reach over $100 a share by end of 2023 which makes it a better investment and buy opportunity for the savvy investor.
In the current consumer environment, eBay will be an outperformer. eBay will maintain a strong position regardless of where the economy is headed, making eBay a Strong Buy.
Authors of this Blog own shares: of Groupon and Apple
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