eBay slides 10% after-hours on disappointing guidance

on Feb 23, 2022
Updated: Feb 24, 2022
  • eBay reports solid Q4 results but guidance came in shy of expectations.
  • Wedbush's Ygal Arounian discussed earnings on CNBC's "Closing Bell".
  • Shares of the eCommerce company are down nearly 10% after-hours.

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eBay Inc (NASDAQ: EBAY) on Wednesday reported its financial results for the fourth quarter that topped Wall Street estimates. Shares still tanked 10% after-hours on weaker-than-expected future guidance.

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Q4 financial highlights

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  • Net income printed at $647 million versus the year-ago figure of $591 million.
  • Earned $1.05 a share in Q4, an increase from 85 cents a share in the same quarter last year.
  • Generated $2.61 billion in revenue representing a year-over-year increase of 5.0%.
  • Gross merchandise volume increased about 1.25%, as per the earnings press release.
  • FactSet consensus was for a dollar of per-share earnings on $2.60 billion in revenue.
  • Annual active buyers and sellers were down 9.0% and 8.0%, respectively.

Guidance for the future

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For the fiscal first quarter, eBay expects revenue to fall in the range of $2.43 billion to $2.48 billion. Its forecast for adjusted earnings stands at $1.01 a share to $1.05 a share. This compared to analysts at $1.08 of adjusted EPS on $2.61 billion in revenue.

The American multinational’s full-year guidance also came in shy of the FactSet consensus. On CNBC’s “Closing Bell”, Wedbush Securities’ Ygal Arounian said:

The quarter came in pretty decent. U.S. did much better than expected. But the outlook for the year has been the concern for eCommerce names across the board. eBay’s guidance below expectation for revenue and GMV is not going to help the story right now.

eCommerce boomed at the onset of the pandemic that pushed stores into temporarily shutting down. Over the past few quarters, however, shopping in person has been regaining its share as COVID restrictions eased. Consequently, online retailers have been taking a hit.

Arounian rates eBay at “neutral” with a price target of $68 that represents a 35% upside from here.

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