Marketplace, PayPal Spin Should be Focus of eBay (EBAY) Investors into Q3 Results - Cowen

Cowen and Company comments on eBay (Nasdaq: EBAY) heading into the e-commerce giant's Q3 report, which is expected out after markets close today.

Analyst John Blacklege said, We forecast 3Q14 revenue of $4.34BN (11.9% y/y growth and the third quarter in a row of decelerating top-line revenues), modestly below the Street at $4.37BN and slightly below the midpoint of guidance range $4.3BN - $4.4BN. We forecast EBITDA of $1.39BN (9.6% y/y growth), near consensus estimate of $1.35BN. We forecast EPS (Non-GAAP) of $0.67 (vs. $0.64 last year) and in-line with the Guidance range of $0.65 - $0.67.

Aside from a PayPal update, here are some key items to watch with the report:

1. Update on overall global eCommerce market, +/- trends eBay is seeing, how eBay is navigating in emerging markets;

2. We will look for a new product update, for instance the live auction partnership with Sotheby's announced in July;

3. On the Payments side, we would be curious to hear any commentary on Apple Pay and possible impact to the business;

4. We would like some clarity on whether eBay is going to take overseas cash to the US (and incur a big tax bill), mgmt appeared somewhat non-committal on the subject during the spin conference call; and

5. Forward guide for 4Q14, we are looking for $5.09BN in revenue (Street $5.17BN) and $0.87 in EPS (Street $0.91), both modestly below consensus.

Cowen has eBay at Market Perform with a price target of $55.

For an analyst ratings summary and ratings history on eBay click here. For more ratings news on eBay click here.

eBay closed at $50.59 yesterday.

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