The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( Trefis) -- By now you've probably heard that the Holiday buying season started off with a bang on Black Friday, and was followed with more positive news from consumers on Cyber Monday. Not surprisingly eBay (EBAY), Amazon (AMZN) and other online retailers saw a huge jump, too. What may surprise some investors was the fantastic November eBay announced. An 18% jump in year-over-year sales for the month, along with a solid start to the holidays has investors cheering. Especially considering this comes on the heels of a 13.4% year-over-year jump in October.
The company's sales increases have not gone unnoticed by investors, starting the week with a bang. But even with the recent 5% jump in price, the stock remains well below the Trefis target of $38.68 a share. And with some of the recently announced changes, upward revisions may be warranted.
eBay Changing a Winning ModeleBay remains one of the Internet's original success stories. It got to where it is by sticking to the formula of providing individuals and companies with a forum for buying and selling items ranging from cars to collectibles. So, why mess with a good thing, right? According to eBay's management, that's exactly what they've done and is likely at least one of the reasons for the company's recent success. The change management refers to is the EBAY's recent emphasis on fixed prices, which in turn result in faster purchases. As the change takes hold heading into the Holiday shopping season and even into next year, it's likely there will be even more good news coming from the eBay camp.
Upside to Trefis EstimatesThe eBay Marketplace Division drives over 52% of the company's revenues. As the new fixed pricing model matures, increased revenue that comes from it should continue to grow as well. Added to all this is the likelihood eBay's PayPal Division (8.3% of the target price) will benefit too, and investors may find $38.68 a share a bit short sighted. Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV