As we discussed previously in this series, eBay (EBAY) is successfully transforming its business, which can be seen in its strong 1H16 performance. The company expects its fiscal 2016 revenues to be in the range of ~$8.9 billion–$9.0 billion, which is higher than its earlier forecasted range of $8.6 billion–$8.8 billion. The company’s adjusted EPS (earnings per share) are expected to be in the range of $1.85–$1.90 per share, up from its earlier forecast of $1.82–$1.87 per share.
The company’s guidance includes a strong revenue performance and a favorable tax rate of 19%–20%, but adverse currency movements are expected to adversely impact its bottom line.
For 3Q16, eBay expects its top line to be in the range of $2.16 billion–$2.19 billion, which compares favorably to analysts’ revenue expectations of $2.14 billion. The company also expects to report adjusted EPS in the range of $0.42–$0.44 per share, while analysts expect eBay to post EPS of $0.44 per share for 3Q16.
Strategic partnerships and acquisitions
Notably, the company recently entered into a partnership with CaribShopper to expand into the Caribbean market. Prior to this, eBay entered into a partnership with the e-commerce startup MailforAfrica to launch an “eBay Powered by MallforAfrica” dedicated platform.
Also, to expand the global reach of its fast growing StubHub segment, eBay has announced the acquisition of Ticketbis, a Spain-based online ticket marketplace. Ticketbis, which has a presence in 47 countries, will become part of StubHub’s business and should help eBay expand StubHub in Latin America, Europe, and Asia-Pacific. StubHub currently operates in the US, the UK (EWU), Canada, Mexico, Germany, and France. Through its Ticket Utils acquisition, eBay plans to offer sellers enhanced tools in order to manage their inventory more effectively.
Now let’s look at the analyst recommendations for eBay.