EBay continues shift to “Amazon-esque” business

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EBay reported third-quarter earnings results after the bell on Wednesday. The company brought in revenue of $2.22 billion, narrowly beating estimates of $2.19 billion and up 6 percent year-over-year. Adjusted earnings per share came in at 45 cents, slightly above the analyst consensus of 44 cents.

While its financials were up, the stock still fell more than 7 percent in early after-hours trading. Some investors were disappointed by gross merchandise volume, which came in at $20.1 billion, instead of the expected $20.3 billion. Adjusted net income was also down from the same period in the year before, as sales and marketing and other costs increased.

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The company has been doubling down on its marketplace business since spinning off PayPal last year. In particular, eBay has become “more Amazon-esque,” says James Cakmak, analyst at Monness Crespi Hardt. They have expanded their fixed-price merchandise business to offset their shrinking auctions section.

EBay owes some of its recent growth to its “structured data” initiative, which basically means they are tagging keywords to items to improve search engine optimization and make things easier to find on the website.

“We continued to transform the shopping experience on eBay, delivered more personalization capabilities and began to activate our updated brand messaging,” said CEO Devin Wenig, in a statement.

They’ve also been expanding StubHub, their platform for sports and concert tickets. With $1.1 billion in GMV, a 23 percent year-over-year increase, “StubHub is the biggest growth engine for the company,” noted Cakmak.

EBay shares closed Wednesday at $32.52, with a market cap of $36.6 billion. The stock has gone up about 34 percent in the past six months as it has continued to exceed analyst expectations. 

The company also repurchased about $500 million in shares this quarter. EBay raised their full-year revenue outlook to somewhere between $8.95 billion and $9.0 billion.

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