eBay Shares Drop 9% on Lower Revenue Expectations

eBay's stock sees a drop as Q1 revenue expectations fall below estimates. The company's latest earnings also reflect a decline, indicating potential challenges ahead for investors.

Date: 27-02-2025

AI Rating: 4

Revenue Growth: eBay's recent report indicates a slight revenue increase of 0.7% in the fourth quarter, rising to $2.579 billion from $2.562 billion last year. Despite this growth, the company's upcoming revenue expectations for Q1 2025 are projected between $2.52 billion and $2.56 billion, which is below the consensus estimate of $2.59 billion by analysts. This discrepancy may cause concern among investors as it signals potential challenges in meeting revenue goals.

Earnings Per Share (EPS): For the first quarter, eBay anticipates an EPS of $0.98 to $1.02, with adjusted EPS between $1.32 and $1.36. In comparison, analysts' expectations of $1.33 per share highlight a modest underperformance in outlook.

Net Income: The company reported a net income of $680 million for the fourth quarter, a decrease from $728 million the previous year. On a per-share basis, earnings remained stable at $1.40. Excluding certain items, the adjusted earnings increased to $607 million from $560 million year-over-year, surpassing analyst expectations of $1.20 per share.

Overall Impact: The mix of stable EPS performance in the recent quarter against lowered expectations for Q1 creates a cautious sentiment among investors. The announced 9% drop in shares during after-hours trading reinforces this concern, indicating how revenue forecasts and earnings impacts investors' outlook on eBay's stock performance.

Stocks: EBAY