Key factors to note when eBay (EBAY) reports Q1 2020 earnings results

eBay Inc. (NASDAQ: EBAY) is slated to report Q1 2020 earnings results on Wednesday, April 29, after the market closes. Analysts expect the company to report earnings of $0.72 per share on revenue of $2.32 billion.

This will be the first earnings report for Jamie Iannone, who just took over as eBay’s new CEO on Monday. While most companies have experienced a disruption to their businesses amidst the COVID-19 pandemic, ecommerce companies have seen a huge spike in their businesses. eBay is expected to be a gainer from this trend.  

Based on data from Signifyd, ecommerce sales were up around 25% during the week that ended April 20, marking their highest growth rate since late February. Overall ecommerce spending increased 46% since late February.

eBay’s shares have jumped over 30% in the past one month and have gained 8% in the past three months. The stock is currently trading at a level not too far from its 52-week high of $42.

In 2019, eBay delivered revenues of $10.8 billion and enabled over $90 billion of Gross Merchandise Volume. Approx. 60% of GMV was generated outside the US. At the end of 2019, the Marketplace and StubHub platforms had over 180 million active buyers and over 1 billion live listings globally.

In February, eBay completed the sale of StubHub to viagogo for $4.05 billion in cash. The transaction brought in net proceeds of $3.1 billion. The company also said it is exploring strategic alternatives for its Classifieds business and expects to provide an update on this by the middle of this year.

eBay is also expected to benefit from the investments it is making to improve its platform. The company has scaled Managed Payments in the US and Germany and expects to generate $2 billion in revenue from this business by 2022.

For the fourth quarter of 2019, eBay beat expectations despite a 2% drop in revenue to $2.82 billion. Adjusted EPS rose 15% to $0.81.

For the first quarter of 2020, the company guided for net revenue to come between $2.31 billion and $2.36 billion. GAAP EPS from continuing operations are expected in the range of $0.54-0.57 while adjusted EPS from continuing operations are expected to be $0.72-0.75. 

For the full year of 2020, the company estimates net revenue to be between $9.56 billion and $9.76 billion. GAAP EPS from continuing operations are expected in the range of $2.20-2.30 and adjusted EPS from continuing operations are expected in the range of $3.00-3.10.