EBay drops more than 11% after giving light earnings guidance

An employee walks past eBay signage on the firm’s headquarters in San Jose, California.

David Paul Morris | Bloomberg | Getty Photos

Shares of eBay slumped bigger than 11% on Thursday morning after the firm reported an earnings outlook for basically the most recent quarter that fell making an are attempting Wall Road’s estimates.

EBay said Wednesday afternoon that it expects 91 cents to 96 cents in adjusted earnings per share and revenue of $2.98 billion to $3.03 billion within the 2d quarter. Analysts polled by Refinitiv had expected 98 cents per share and $2.98 billion in revenue.

A total lot of merchants were spooked by the lighter-than-expected outlook and either downgraded the inventory or lowered their mark targets. On-line marketplaces comparable to eBay, Amazon, Etsy and Wayfair all face rising stress to exhibit that the pandemic-fueled enhance to their agencies can final as the vaccine rollout hastens and the financial system reopens.

Wedbush analysts Ygal Arounian and Chad Larkin downgraded eBay on Thursday to neutral from outperform following the outcomes, asserting that the steering implies the firm is poised to supply succor unheard of of the features it generated in 2020.

“Moreso, visibility into the following quarters as we lap Covid features is proscribed as mobility will enhance,” the analysts wrote in a exhibit to prospects. “So we jog to the sidelines as we potentially head into four quarters of negative [year-over-year gross merchandise volume] enhance.”

The funding agency lowered its mark purpose on eBay shares from $74 to $63.

The disappointing steering overshadowed eBay’s better-than-expected outcomes for the first quarter. The firm posted revenue of $3 billion, which surpassed consensus estimates of $2.97 billion. Adjusted earnings per share were $1.09, increased than Wall Road’s forecast of $1.08.

Inappropriate merchandise volume grew 29% year over year to $27.5 billion, above analysts’ expected $26.3 billion. GMV is a carefully watched metric within the e-commerce industry that measures the total mark of all items supplied on the dwelling.

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