eBay (EBAY) On Deck For Q3 Results

October 21, 2009 1:11 PM EDT

eBay (NASDAQ: EBAY) shares are trading higher ahead of its earnings release after the market today, October 21, 2009. Shares are up about 0.72% to $25.24.

Analysts currently expect eBay to report third quarter EPS of $0.37 on $2.14 billion in revenues. EBay beat both of the Street estimates when it posted a $0.37 EPS and $2.1 billion in revenues for its second quarter earnings report. Last year at this time, eBay reported a quarterly EPS of $0.46 and revenue of $2.12 billion.

eBay shares are up about 18% through the third quarter. In comparison, the Retail (Catalog and Mail Order) sector, as a whole, is up only 8.9%.

According to data from Bloomberg, 15 have a Buy rating on eBay, 17 have a hold, and 1 suggests Sell. eBay analysts have an average price target of $26.68.

Recently, Benchmark maintained their Hold rating on eBay and raised their price target from $21 to $25. Benchmark commented, "We forecast 3Q09 Marketplace net transaction revenue of $1.1 billion representing a decline of 6% y/y but 4% growth sequentially.PayPal could return to double-digit growth in Q3 reaching $658 million in transaction revenue. Skype should maintain strong high-teens growth coming in at $163 million in transaction revenue... A return to growth at eBay's Marketplace and accelerated growth at PayPal could drive cash flow and earnings growth at a high-single-digits rate in 2010."

Kaufman Brothers upgraded eBay to Buy from Hold, and raised their price target to $29. "We are upgrading eBay to Buy, given: 1) improved marketplace outlook, 2) potential for acceleration in marketplace performance in 2010 and beyond with ongoing user experience and seller improvements, and 3) expectations for upside to Street estimates in 2H09 and 2010," Kaufman said. They estimate Q309 revenue at $2.199 billion, and Q3 EPS of $0.39. They see FY09 EPS at $1.61 and revenues of $8.67 billion.

Goldman maintained their Neutral rating on eBay, but raised estimates and their price targets. Goldman lifted eBay's price target from $20.50 to $25. EPS estimates were raised from $0.36 to $0.37 for Q309, and they raised raise 2009-11E EPS by 1%-2% to $1.54, $1.59, and $1.69.

Taking a more positive view, FBR Capital maintained their Outperform rating on the company while raising some key estimates. The firm raised their price target from $27 to $30, sees FY09 revenue between $8.4 and $8.5 billion, and FY09 EPS of $1.55. On these changes, they said, "Although the macro environment is stabilizing and some user and seller metrics show signs of improvement, eBay is still in the very early innings of fixing the underlying foundation of its Marketplace business. Search results remain plagued with spam and irrelevant listings, product pages are underdeveloped or nonexistent, and free shipping is available on less than half of all listings."

eBay will issue its Q309 results via press release at approximately 4:15 PM
(EDT) on October 21, 2009. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

Looking back through the last several quarters reveals that eBay has been constantly beating the consensus, albeit not excessively. Considering the recession has been declared over by several leading economists, might the online auction giant see even larger growth as consumers free-up more spending dollars?

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