Why eBay (EBAY) Stock Is Falling Today

NEW YORK (TheStreet) -- Shares of eBay Inc. (EBAY) are down 2.45% to $52.90 after Apple (AAPL) unveiled its iPhone 6 and 6 Plus, and said it plans to begin a mobile payment solution called Apple Pay, a system for using the phone to make credit card payments, and a competitor to PayPal.

It will be available beginning next month.

TheStreet Ratings team rates EBAY INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate EBAY INC (EBAY) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EBAY INC has improved earnings per share by 8.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EBAY INC increased its bottom line by earning $2.18 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.97 versus $2.18).
  • 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 5.6% when compared to the same quarter one year prior, going from $640.00 million to $676.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 12.6%. 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 0.28 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $1,494.00 million or 47.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.66%.
  • You can view the full analysis from the report here: EBAY Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE

If you liked this article you might like

18 Best Stock Picks for the Impending Consumer Spending Boom

18 Best Stock Picks for the Impending Consumer Spending Boom

Walmart's Slowing E-Commerce Growth Shows Just How Formidable Amazon Is

Walmart's Slowing E-Commerce Growth Shows Just How Formidable Amazon Is

TheStreet Podcast: Go Inside the Goldman Sachs Tech & Internet Conference

TheStreet Podcast: Go Inside the Goldman Sachs Tech & Internet Conference

PayPal COO Talks to TheStreet About eBay Deal, Growth Plans and Blockchain

PayPal COO Talks to TheStreet About eBay Deal, Growth Plans and Blockchain

Make PayPal Your Friend With This Trade

Make PayPal Your Friend With This Trade