eBay Inc $EBAY is reporting earnings after close on Tuesday (1/27). This will be the second quarter since eBay $EBAY separated from PayPal $PYPL, and we are looking to see if they can follow up on last quarters solid performan
ce. Here is a quick fundamental and technical analysis on the company prior to earnings.
We ran the numbers through the SprinkleBit Analyzer to see how eBay’s $EBAY fundamentals compare to its peers. The competitors chosen are other retailers that also have a large online presence.
Based on Ebitda multiple eBay $EBAY is undervalued. We used Ebitda multiple for our valuation as it is closer to cash flow. Retailers with brick and mortar stores have a higher debt level (to buy real estate) which skews the PE value. The analyzer crunched the numbers and we received an implied share price of $35.53. With todays’s closing share price of $25.27, this represents an upside of 40.62%.
Fundamental analysis tells you what the company is worth, where as technical analysis shows where the market priced it at.
By performing a quick technical analysis on the daily chart, eBay $EBAY shows that on an earnings miss the stock can fall to $24. If they beat earnings, the stock has the potential to rise to $27. Based on the trend this shows a possible 5.3% downside and a 6.8% upside.
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