This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

eBay Delivers the Goods and Just Became Better

NEW YORK (TheStreet) -- If eBay (EBAY) were valued near Amazon's (AMZN) 160 or more P/E valuation, eBay shares would trade for over $500.

When you consider eBay earns more profit per share than Amazon, maybe it's eBay shares that should trade above $300. eBay has so many superior metrics compared to Amazon it's hard to know where to begin. Take a look at the two companies' cash-flow history.

EBAY Free Cash Flow TTM ChartEBAY Free Cash Flow TTM data by YCharts

Wall Street is in love with Amazon's revenue growth machine, but between the two eBay is the one that continues to deliver shareholder value, at least on the bottom line. eBay's latest example of controlled expansion is through its PayPal division.

Braintree Payment Solutions agreed to be acquired by PayPal for $800 million. eBay has about $11 billion in cash and equivalents, based on the latest reported balance sheet. Because the deal is expected to close during the fourth quarter, investors shouldn't expect a material change in PayPal's 2013 processing volume. According to eBay's CEO John Donahoe, "Braintree is a perfect fit with PayPal."

Braintree is a six-year-old, fast-growing startup designed to make mobile payments easy, and is exactly what PayPal wants to maintain the lead in online payment processing. Amazon, Google (GOOG) and others are actively trying to duplicate the cash cow PayPal has become.

Braintree reportedly processed over $3 billion in payments in 2011 and, according to research firm Gartner, the mobile payment market is expected to grow to over $235 billion this year, and more than $700 million by 2017.

Besides Braintree's organic growth, the company has grown through mergers. Last year Braintree acquired Venmo for $26.2 million, a mobile app that allows friends to transfer money for free. Venmo gives PayPal another method to bring consumers into its ecosystem and generates profits when users fund transfers through a credit card.

EBAY Gross Profit Margin Quarterly ChartEBAY Gross Profit Margin Quarterly data by YCharts

Stock quotes in this article: EBAY, AMZN, PAY, GOOG 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,262.56 +89.32 0.55%
S&P 500 1,842.98 +12.37 0.68%
NASDAQ 4,034.1610 +11.4670 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs