eBay Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that eBay Inc. (NASDAQ:EBAY) released its annual result to the market. The early response was not positive, with shares down 7.5% to US$64.74 in the past week. It looks like a credible result overall - although revenues of US$10b were in line with what the analysts predicted, eBay surprised by delivering a statutory profit of US$3.94 per share, a notable 12% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for eBay

After the latest results, the 30 analysts covering eBay are now predicting revenues of US$10.5b in 2025. If met, this would reflect a credible 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 6.3% to US$3.98 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$10.6b and earnings per share (EPS) of US$3.83 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$65.01, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on eBay, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$49.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await eBay shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that eBay's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 4.2% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than eBay.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around eBay's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple eBay analysts - going out to 2027, and you can see them free on our platform here.

You can also view our analysis of eBay's balance sheet, and whether we think eBay is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.