NEW YORK (TheStreet) -- Shares of eBay (EBAY) are slightly higher at $54.04 in pre-market trade after it was reported that Alibaba Group (BABA) is open to working with eBay's PayPal to expand payment options after shoppers bought a record amount of merchandise during the Chinese company's annual Singles' Day promotion, Bloomberg reports.
The company is already talking with Apple (AAPL) about payments and may collaborate with PayPal in the future, Vice Chairman Joseph Tsai said in an interview today, Bloomberg said.
Alibaba sold more than 45.7 billion yuan ($7.5 billion) of goods within 19 hours of the promotion kicking off, passing last year's record.
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 revenue growth, growth in earnings per share, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EBAY's revenue growth trails the industry average of 27.5%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- EBAY INC's earnings per share improvement from the most recent quarter was slightly positive. 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 ($2.95 versus $2.18).
- Net operating cash flow has slightly increased to $1,368.00 million or 2.54% when compared to the same quarter last year. Despite an increase in cash flow, EBAY INC's cash flow growth rate is still lower than the industry average growth rate of 25.25%.
- The gross profit margin for EBAY INC is currently very high, coming in at 75.14%. Regardless of EBAY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.46% trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.47 is sturdy.
- You can view the full analysis from the report here: EBAY Ratings Report