eBay Stock Slumping on Negative Piper Jaffray Note

NEW YORK (TheStreet) -- Shares of eBay Inc  (EBAY) were slumping, down 1.91% to $62.02 in early market trading Monday, after analysts at Piper Jaffray issued a negative note on the online auction site's spin-off of its payment processing service PayPal this morning.

The firm reiterated an "underweight" rating with a $50 price target.

Analysts believe investor optimism will rise into the PayPal spin-off this fall, but will fall after the move.

Piper added that half of PayPal's payments will be through mobile devices by the end of 2016 amid greater competition from Google's (GOOGL) Android Pay and Apple's  (AAPL) Apple Pay. 

San Jose, Calif.-based eBay is a global technology company that enables commerce through reportable segments including marketplaces, payments and enterprise.

Separately, 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 a few notable 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 solid stock price performance, compelling growth in net income, revenue growth, notable return on equity and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

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

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 126.9% when compared to the same quarter one year prior, rising from -$2,326.00 million to $626.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, EBAY INC's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: EBAY Ratings Report

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