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Will eBay Be the Next Wal-Mart?

When it comes to eBay stock, the positive perception of this alliance may cause the shares to test the $50-per-share price target. As the chart below shows, EBAY shares have also had a great year as its earnings-per-share growth lifted the stock price, as the late Jackie Wilson would phrase it musically, "higher and higher."

EBAY Chart EBAY data by YCharts

If the economy continues on a no-to-slow growth track, people aren't only going to shop at places like Wal-Mart and Dollar Tree. They're going online to buy and to sell all kinds of heirlooms, collectibles, no-longer-needed equipment and thousands of other items that cash-starved shoppers will want to either sell or bid on. That's going to continue to goose eBay's traffic volume and bottom-line profits.

The lower Bollinger Band for EBAY suggests a potential buy-in target price for new investors at around $43 and the 200-day Moving Average is rapidly ascending towards the $40-a-share level.

It's more than possible that an overall stock market pullback is coming in the days and weeks ahead, so patient investors may have the opportunity to buy EBAY below its current exuberant price.

Nevertheless, eBay's nearly 145% year-over-year second-quarter growth rate and 23% revenue growth rate suggests this company is on track for big growth ahead, and may emerge eventually as the biggest, most profitable "wholesaler/retailer" on the worldwide web, bar none.

At the time of publication the author had no position in any of the stocks mentioned in this article.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.
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EBAY $22.08 -1.08%
WMT $65.32 -0.71%
AAPL $93.70 -0.60%
FB $101.91 0.90%
GOOG $683.11 -0.15%


Chart of I:DJI
DOW 15,660.18 -254.56 -1.60%
S&P 500 1,829.08 -22.78 -1.23%
NASDAQ 4,266.8370 -16.7550 -0.39%

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