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4-Traders Homepage  >  Equities  >  Nasdaq  >  EBay Inc    EBAY


Delayed Quote. Delayed  - 10/21 10:00:00 pm
29.06 USD   +0.14%
10/19DJEBAY : Makes Bid for Younger Shoppers With Revamped Image
10/19DJEBAY : Revenue Grows, Though Profit Declines
10/19DJEBAY : Revenue Grows, Though Profit Declines
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EBay : Makes Bid for Younger Shoppers With Revamped Image

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10/19/2016 | 11:40pm CEST
By Laura Stevens 

EBay Inc. wants people to think of it as a first stop for all online shopping, not as an auction house of stuff from grandma's attic.

That was a key message from executives during the company's third-quarter earnings call Wednesday. EBay reported revenue grew 5.6% to $2.22 billion, beating analyst expectations for a third straight quarter of sales gains -- signs that the company's new e-commerce strategy is starting to pay off.

Still, it appeared some investors were disappointed with the company's outlook, as shares fell 8% in after-market trading after closing earlier at $32.52.

EBay is trying to redefine itself to capture new, younger consumers who shop on their phones and don't have time to scroll through thousands of listings. It is rolling out improved search features and personalized recommendations and reviews. A new ad campaign stars a supermodel, and wine is now available.

EBay should have already shed its old-school reputation, the company says: 80% of the items on the site are new, and 86% are sold at a fixed price. But it faces stiff competition from Amazon.com Inc. as well as traditional retailers that now excel in e-commerce.

"We asked ourselves why we exist as a brand, how we personify ourselves and what it is we offer," said Karl Isaac, eBay's vice president of global brand. EBay aims "to start closing the perception gap."

Auctions are an outmoded fad of the early internet, with most sites abandoning that method in favor of setting a fixed price, said Stanford University economics professor Liran Einav, who has studied eBay.

Shopping online has become more functional compared with during the early days of eBay, which started in 1995, because people now have many more ways to spend time online, from video streaming to social media. The volume of pricing information online also makes it easy to know an item's value, making auctions less compelling. "People got excited about bidding and winning and losing, and it's not as fun any more," he said.

Over the years, eBay has repeatedly tried to reinvent itself as online shopping matured, including by luring big brands to sell on the site. It is also facing stiffer competition, as major retailers from Target Corp. to Wal-Mart Stores Inc. have amped up their e-commerce businesses. EBay competes with Amazon to attract sellers to its site.

But the stakes are higher for eBay now. It has been struggling to find its footing after splitting from PayPal Holdings Inc. last year, following a contentious battle with activist investor Carl Icahn.

The split from PayPal caused a period of soul searching at eBay, said Mr. Isaac. With a largely new slate of executives, the company spent months outlining responses to key trends changing its business, including a growing shift toward shopping on phones and the availability of data.

In one of the biggest changes, eBay is cataloging its listings. The move, which requires sellers to input more information to better organize products, should help eBay appear higher in Alphabet Inc. unit Google's search results. That has been a challenge for eBay because individual listings change so quickly.

It also means that instead of a list of 65,000 individual digital camera offerings, the site can now display cameras grouped by brand, price and deals to better direct shoppers unwilling to scroll.

EBay is also adding more personalized recommendations based on previous purchases. The site should recognize if a shopper would prefer a $7 scarf versus a $70 scarf, for example.

Some of the changes benefit sellers. A new one-stop platform tells sellers what items are selling well on the site or running low. EBay has also added branded boxes and tape, increasing its visibility in a crowded market.

For Cyndi Zlotow, who has been selling on eBay for 14 years from near Chicago, the changes are working. Over the past couple of months, she has seen an increase in new buyers of the as many as 2,000 new and used fashion items she has listed.

Still, "I think there is a hurdle that eBay has to overcome with their brand," she said, adding that some shoppers still overlook it as an option, including her millennial children.

Last month, the company launched a new social-media advertising campaign featuring young supermodel Karlie Kloss, who outfits her apartment with items bought on eBay such as a Bluetooth speaker and a KitchenAid stand mixer.

EBay has a strength in that many millennials are open to buying vintage or used offerings, said Ken Seiff, managing partner at early-stage retail technology venture capital fund Beanstalk Ventures and a former retail executive. "But that's not the direct message of eBay's new marketing campaign," he said.

Jason Burke is a frequent eBay buyer, most recently purchasing three '90s-era T-shirts, a bolo tie and some old videogames via bidding or fixed-price sales. The 34-year-old comedian and writer said vintage clothes are cheaper on eBay than at stores near where he lives in Brooklyn.

But even the self-described eBay lover buys new iPhones from Apple Inc. and uses Amazon to purchase items for his dog and staples for around the house. EBay is "just not where I think to go for something brand new," he said.

On Wednesday, eBay posted net income of $413 million, or 36 cents a share, down from $539 million, or 45 cents, a year earlier. Excluding certain items, the company reported earnings of 45 cents a share, up 2 cents from a year earlier and topping the 44 cents analysts surveyed by Thomson Reuters had expected.

Write to Laura Stevens at laura.stevens@wsj.com

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Financials ($)
Sales 2016 8 980 M
EBIT 2016 2 797 M
Net income 2016 2 295 M
Finance 2016 1 113 M
Yield 2016 -
P/E ratio 2016 14,92
P/E ratio 2017 15,95
EV / Sales 2016 3,49x
EV / Sales 2017 3,37x
Capitalization 32 487 M
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eBay Inc Technical Analysis Chart | EBAY | US2786421030 | 4-Traders
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Technical analysis trends EBAY INC
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Mean consensus OUTPERFORM
Number of Analysts 40
Average target price 32,8 $
Spread / Average Target 13%
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Devin N. Wenig President, Chief Executive Officer & Director
Thomas J. Tierney Non-Executive Chairman
Wendy Jones Vice President-Global Operations
Scott Schenkel Chief Financial Officer & Senior Vice President
Stephen Fisher Chief Technology Officer & Senior Vice President
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