NEW YORK (TheStreet) -- eBay (Nasdaq:EBAY) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- EBAY's revenue growth has slightly outpaced the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although EBAY's debt-to-equity ratio of 0.11 is very low, it is currently higher than that of the industry average. To add to this, EBAY has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.39% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EBAY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market on the basis of return on equity, EBAY INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
--Written by a member of TheStreet Ratings Staff. TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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