eBay shares remain in a bull market supported by Q4 results

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Feb 10, 2021
  • eBay reported better-than-expected Q4 results this February
  • Total revenue has increased by 28.1% in Q4
  • Bank of America assigned its price target on eBay to $71

eBay (NASDAQ: EBAY) shares have advanced from $50.4 above $64 since the beginning of January, and the current price stands around $62. Shares of this company still offer a good opportunity for investors, and most financial analysts are also expecting its price to rise considerably in the next several years.

Fundamental analysis: Total revenue has increased by 28.1% in Q4

eBay is an online e-commerce marketplace that continues to expand its marketplace, and according to analysts, shares of this company have a bullish outlook. eBay reported Q4 results this February; total revenue has increased by 28.1% Y/Y to $2.87B while Q4 GAAP EPS was $1.12 (beats by $0.48).

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Total revenue has increased above the expectations (+$160M) while the number of active buyers grew by 7%. A gross merchandise volume rose 21% Y/Y in Q4, and the company generated $883M of operating cash flow.

“Our advertising business will continue to outpace volume through promoted listings and other products. As we defend the quarter, we plan to expand our new vertical experiences to more markets and innovate in more categories”, said Jamie Iannone, Chief Executive Officer of eBay.

eBay has raised its FQ1 outlook, and according to estimates, the company expects revenue of $2.94B to $2.99B and EPS of $1.03 to $1.08. eBay shares remain in a buy zone after Bank of America assigned its price target to $71 and reported that this company has a positive outlook.

“We are encouraged by eBay’s GMV strength vs. our expectations (higher base entering 2021) and strong traction with payments and advertising initiatives (higher ests.), with more potential upside ahead (there were hints on finding the next billion in ad revs. on call),” Bank of America reported.

eBay has increased its quarterly dividend by 12.5% to $0.18 and announced expanding its share repurchase program by an additional $4B.

Technical analysis: Bulls remain in control of the price action

Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are $55 and $50, $65 and $70 represent the resistance levels.

eBay shares have been moving in an uptrend since the beginning of April, and the technical picture implies that the price may advance above $65 resistance this February. If the price jumps above $65, it would be a signal to trade shares, and we have the open way to $70.

On the other side, if the price falls below $50, it would be a strong “sell” signal, and the next target could be around $45 or even $40.

Summary

eBay reported better-than-expected Q4 results this February,  the number of active buyers grew by 7%, and the company raised its FQ1 outlook. Bank of America assigned its price target on eBay to $71, and for now, everything indicates that the price may advance above $65 resistance this February.

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