EBay (EBAY) experienced a decline in its stock price late Wednesday, despite reporting third-quarter results that exceeded analysts’ expectations. The drop appears to stem from a mixed forecast for the crucial holiday quarter.
The San Jose, California-based e-commerce giant announced an adjusted earnings of $1.36 per share for the quarter ending in September, which marks a 14% increase compared to the same period last year. This performance outpaced the expectations of analysts surveyed by FactSet, who had projected earnings of $1.33 per share. Additionally, eBay’s sales rose by 9% to $2.82 billion, exceeding the anticipated $2.73 billion.
For the upcoming quarter, eBay provided a forecast of $2.86 billion in sales at the midpoint, surpassing analysts’ expectations of $2.8 billion for the December quarter. However, the company predicted adjusted earnings to fall between $1.31 and $1.36 per share, which is below the $1.38 per share that analysts had been expecting.
In after-hours trading, eBay shares slid nearly 7% to $92.95. Prior to the earnings report, the stock had already experienced a slight decline during regular trading hours. Despite this downturn, eBay’s stock has surged by approximately 57% throughout the year, fueled by strong sales growth and a strategic focus on AI-driven tools, which have garnered favorable attention from Wall Street analysts.
Prior to this earnings report, eBay’s stock held an impressive IBD Composite Rating of 93 out of 99, which reflects a combination of five different proprietary ratings. Stocks with a Composite Rating of 90 or above are generally considered to be among the best growth options. Market watchers noted that eBay’s shares are currently forming a cup base with a buy point at 101.15, highlighting potential future growth despite current market challenges.
Overall, there remains optimism for eBay’s future as it continues to innovate and adapt in a competitive e-commerce landscape.