EBAY to Report Q4 Earnings: What's in Store for the Stock?

Core Viewpoint - eBay is set to report its fourth-quarter 2024 results on February 26, with expectations of modest revenue growth and potential impacts from new initiatives and macroeconomic factors [1][2][6]. Revenue Expectations - eBay anticipates fourth-quarter revenues between $2.53 billion and$2.59 billion, with a year-over-year change expected to be between -1% and 1% on both FX-neutral and spot rate bases [2] - The Zacks Consensus Estimate for revenues is $2.58 billion, indicating a 0.64$1.17 and $1.22, reflecting a year-over-year growth of 9$1.20 per share, suggesting a rise of 12.15% from the same quarter last year [3]. Strategic Initiatives - eBay's UK C2C initiative aims to enhance gross merchandise volume (GMV) by removing seller fees while introducing buyer fees in early 2025, which is expected to increase listings and seller engagement [4] - Although the fourth-quarter results may show limited benefits from this initiative, it is projected to unlock a larger total addressable market and drive long-term revenue growth [4]. Advertising Revenue Growth - eBay's advertising revenues grew by 11% year-over-year in the third quarter, reaching $408 million, with first-party ads increasing by 14% [5] - Continued growth in advertising revenues is expected to help offset pressures from the UK C2C initiative in the fourth quarter [5]. Market Challenges - The fourth quarter is likely to face challenges due to a shorter holiday shopping season and distractions from U.S. elections, which may have shifted consumer spending patterns [6] - These factors are expected to negatively impact transaction volumes and overall revenue growth for the quarter [6]. Technological Enhancements - eBay employs AI-powered tools for listing and bulk listing, which streamline the selling process and enhance seller engagement [7] - These tools are anticipated to improve operational efficiency and positively influence the bottom line in the fourth quarter [7].