This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

Despite Weak Results and Outlook, eBay Shares Look Compelling

Stocks in this article: EBAYAMZNTWTR

NEW YORK (TheStreet) -- Shares of eBay (EBAY) are feeling the effects this morning of the first-quarter loss the company reported yesterday, whether warranted or not.

The stock was recently trading at $51.19, down 6%. During the past year, the stock has fallen 2.4%, compared with a gain of 23% for the Nasdaq Composite index.

Late Tuesday, eBay posted a $2.33 billion loss, but that was primarily the result of a $3 billion tax charge due to the repatriation of $9 billion in overseas cash. Excluding that, the company earned 70 cents per share, 3 pennies above the average estimate of analysts.

Revenue rose 14% to $4.26 billion, which was slightly above the $4.23 billion Wall Street estimates.


WATCH: More market update videos on TheStreet TV | More videos from Brittany Umar

The company slightly increased the upper end of second-quarter revenue estimate, while it decreased its earnings-per-share projection to between 67 and 69 cents. It had expected 70 cents.

While the outlook and confusion over the reported loss sent the stock lower, perhaps there's also some guilt by association as tech darling Twitter (TWTR) is taking a massive haircut today, and others associated have also been punished in recent weeks.

The bottom line for eBay, however, is that the shares look compelling here in my view. There are few opportunities these days to own a company that trade for as low as 15 times forward earnings and that consistently boast net profit margins in the high teens or better.

Furthermore, the balance sheet continues to impress. The company ended the quarter with $7.8 billion in cash and marketable securities, and an additional $5.2 billion in long-term investments. In total, that equates to about $10 per share in cash and investments. Meanwhile, debt remains low at $4.1 billion.

1 of 2

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.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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