eventually surfaced, this time from AllThingsD. In it, eBay CEO John Donahoe admitted that his company's outlook may have been a bit too downbeat. He said, "the truth is Bob
Swan, CFO and I both have colds. I think it came across more negative than intended." While blaming a cold may perhaps be a first, it was good for the CEO to clear the air for shareholders. Although in the report he still expressed caution, Donahoe did suggest that the government resolution could help holiday shopping. Regardless, I think shares could be undervalued. Up 2.3% this year, the stock is lagging the S&P 500, which is up nearly 22% in 2013. Using the middle of eBay's fourth-quarter estimated earnings range, we can predict that eBay will earn $2.70 a share on $16.06 billion in revenue in 2013, an increase of 14.4% in earnings and 13.9% in revenue from 2012. Of course, just because the company has demonstrated double-digit growth year-over-year, doesn't mean the share price has to appreciate. If the company isn't growing as fast as analysts had hoped, the valuation will compress, adding downward pressure to the stock price.