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eBay Q3 Earnings Preview: Investors Eye Key Growth Metrics

By:Thomas Westwater

eBay is scheduled to report Q3 earnings results on Nov. 7. Investors are on edge after the company’s Q2 earnings disappointed. Can eBay beat expectations this time?

  • eBay is scheduled to report third quarter earnings results on Nov. 7.
  • Investors are on edge after the company’s Q2 earnings disappointed.
  • Earning per share of $0.99 seen on $2.5 billion in revenue.

eBay (EBAY) is scheduled to report third quarter fiscal results after the markets close on Wednesday, Nov. 7. A conference call will follow at 5:00 p.m. (EST), according to a company press release.

eBay Q3 numbers: gross merchandise value (GMV) in focus

Investors are on edge after eBay disappointed them last quarter when gross merchandise volume fell 2% to $18.2 billion. This quarter, however, there is hope gross merchandise value (GMV) will increase slightly as the company returns to a growth-focused posture.

Earnings per share (EPS) on an adjusted basis is seen crossing the wires at $0.99 and generally accepted accounting principles (GAAP) is seen at $0.70 per share. That comes on an expected $2.5 billion in revenue, and adjusted net income is seen at $532 million, according to Bloomberg data.

Analysts’ ratings for eBay stand at eight buy ratings, 21 hold ratings and two sell ratings, with an average target price of $48.58 per share. The stock price is trading at about 38.96 per share after dropping over 11% last month amid a broader market selloff.

The number of active buyers is also under the microscope, but analysts see the number falling slightly as the company turns its focus to a quality over quantity strategy. Artificial intelligence investment and its international segment are also in focus but, for now, those segments are expected to drag on operating margins. Investors may inquire more about its new luxury consignment strategy, which has excited long-time investors.

Trading eBay earnings

eBay currently offers some attractive premium in its options chain, with an implied volatility rank (IVR) of 85.8. The Nov. 10 expiry shows an expected move of +/- 2.75 points from the current 39.01 stock price.

A strategy to play a volatility contraction through an iron condor or short strangle could be an attractive option for those with a neutral outlook on the stock price. For those expecting a subsequent rise in the stock price, a short put spread strategy is a way to play that directional assumption.


Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater 

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