NEW YORK (TheStreet) -- Shares of eBay (EBAY - Get Report) closed higher by 1.28% to $61.77 on Thursday afternoon, following a Reuters report suggesting the private equity firm Thomas H. Lee is close to acquiring the online auction site's enterprise unit, for almost $1 billion.
Thomas H Lee is said to be leading the bidding war for the unit, although there have been persistent arguments over the price and it is possible no deal will be reached.
eBay's enterprise business helps retailers across the globe boost their online presence and ecommerce capabilities, Reuters noted. In January eBay said it would explore its strategic options for the unit, as it doesn't fit in with its PayPal and market place divisions.
eBay purchased its enterprise unit, formally known as GSI Commerce, in 2011 for $2.4 billion, Reuters added. Over the past few years the unit has lost customers and seen slow growth.
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 several positive factors, 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 6.1%. 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