eBay (EBAY) PT, Estimates Cut at RBC Capital Amid Weak Marketplace Results

RBC Capital analyst Mark Mahaney reiterated Sector Perform rating and lowered his price target on eBay (NASDAQ: EBAY) to $29.00 (from $30.00) following results after the close, which showed struggling marketplace results.

Mahaney commented, "Against low expectations, EBAY posted an in-line and lower Q4, with both Revenue and EPS in-line with Street. The company lowered guidance, largely FX related but fundamental trends were incrementally negative sending the stock materially lower after-hours. eBay also repo’d $550MM of stock."

The Quarter Keys, according to Mahaney: 1) Mixed Fundamental Trends – 5% ex-FX Revenue growth was the same as in Q3 & Q2, while 34% Op Margin was down 200bps+ Y/Y and Q/Q; 2) GMV Trends Stable Tho Still Underperforming-- 4% U.S. GMV (Gross Merchandise Volume) growth and 6% Int'l GMV growth (ex-FX) were relatively consistent with the past 3 qtrs but continue to imply major ecommerce market share losses – structured data improvements and marketing innovations are being implemented, but we believe the outlook is very uncertain; 3)Marketplace Metrics A Bit Light– 4% Active Buyers growth and 4% Sold Items growth are recent historic lows; 4) Stubhub Showed Impressive Growth– 30% GMV growth; 34% Revenue growth, driven by pricing format changes and an improved Mobile interface; & 5) Very Healthy FCF With Share Repos– EBAY generated $1B in FCF in Q4 and repurchased $550MM of stock, with $1.8B authorization remaining.

The firm's ’16 Revenue estimate slips by 2% to $8.8B, while our Non-GAAP EPS goes to $1.88.

For an analyst ratings summary and ratings history on eBay click here. For more ratings news on eBay click here.

Shares of eBay closed at $26.42 yesterday.

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