(EBAY) - Get Report

? Cheap?

The online auction house has been called many things lately -- from the world's greatest flea market to the last Internet giant standing -- but cheap isn't one of them. Until Tuesday, that is.

In a highly bullish report, WR Hambrecht analyst Derek Brown writes that "eBay's relative valuation is extremely compelling." With his comments Brown breaks with many on Wall Street who tout the company's fundamentals but say the stock, which has more than doubled this year, is pricey by traditional valuation methods.

"Our view of the world is a little different," he writes. "Though we won't go as far to say that eBay is actually a 'value' play at these levels, we would argue that it is extremely attractive relative to other technology and Internet bellwethers." (He has a strong buy on the stock, and his firm hasn't done recent underwriting for eBay.)

eBay shares rose $2.70, or 4%, to trade at $69.70 at midday.

Brown backs his view by comparing eBay with a group of 20 technology giants that includes


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AOL Time Warner




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. Instead of simply using the traditional way of gauging how cheap or expensive a stock is, by compiling a price-to-earnings ratio and comparing it to the expected growth rate, Brown takes a more tortuous route.

He looks at enterprise value -- market capitalization plus debt -- and compares it to revenue and revenue growth. On this basis, he concludes that eBay's shares would need to more than double, to $152, before it was even in the middle of the pack.

He doesn't stop there: Using a price-to-earnings-growth basis, he finds that eBay is also cheap. To be at the average, San Jose, Calif.-based eBay would need to trade at more than $84, or about 26% higher than current levels.

Ahead of the Pack
eBay vs. Nasdaq and other big tech names

In a separate analysis, Brown compares eBay with



to make the case that eBay is a good buy. He notes that on a price-to-earnings basis Yahoo! is more than 140% more expensive than eBay. And get this: On a price-to-earnings to growth basis, he finds that Yahoo! is more than 1,700 times more expensive than eBay.

This is all fine, but it doesn't change the fact that eBay trades at more than 142 times this year's fiscal year's estimated earnings, according to Thomson Financial/First Call -- nearly three times its projected growth rate of 52%.

Might a more logical conclusion from Brown's analysis be that all those other companies are also expensive?

"It is raising eyebrows," Brown says of his report. "I still think people are looking at it with a cautious eye."