EBay Inc Stock Buy Recommendation Reiterated (EBAY)

Editor's Note: 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.

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 increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 18.8% when compared to the same quarter one year prior, going from $570.00 million to $677.00 million.
  • EBAY's revenue growth trails the industry average of 30.3%. Since the same quarter one year prior, revenues rose by 14.4%. 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 0.21 is very low, it is currently higher than that of the industry average. To add to this, EBAY has a quick ratio of 1.81, 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 31.35% 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.

eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. eBay has a market cap of $68.0 billion and is part of the services sector and retail industry. The company has a P/E ratio of 25.00, above the S&P 500 P/E ratio of 18.00. Shares are up 2.7% year to date as of the close of trading on Wednesday.

You can view the full eBay Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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