eBay Earnings Eve Examinations (feeling a little alliterate this evening) – part I

January 22, 2008

Marketplaces ChannelAdvisor By ChannelAdvisor

Good evening eBay Strategy readers.  Did you know that there are over 20 analysts that follow eBay?   If you were to take all of that deep thinking about eBay, mix it all up and look at the average (this is called consensus in wall st. speak), you would end up with the Q4 consensus at $.41 EPS on $2.14b revenue (as reported by Thomson Financial).

That’s interesting and something to look for tomorrow, but to be honest, doesn’t really teach you anything.  What I always find more interesting is to take the analysts, line them up from most positive (bulls) to least (bears) and then dig into the top and bottom some and see what you learn.

Here’s my non-scientific attempt at doing this for you.  For each analyst, I’ve listed their name, firm, their ‘rating’ on the stock (usually buy/sell/hold, but sometimes some other word like that) and if available the price target.

Disclaimer: this is not a complete list.  Analysts change their ratings constantly and I did my best to find their latest ratings/price targets, but I’m sure I’ve flubbed at least one of these so don’t take this as a definitive list or anything like that.

The Bulls

  • Goldman (Noto – now going to NFL – how about some tix bro!?) – Recommend List
  • Heath Terry, Credit Suisse – Outperform – $46
  • Bob Peck, Bear Stearns – Outperform – $36
  • Imran Kahn, JP Morgan – Overweight
  • Shawn Milne (the ‘e’ is silent), Oppenheimer – Buy
  • Mark Mahaney, Citi – Buy
  • Aaron Kessler, Piper Jaffray – Buy

On the fence (come on guys!)

  • Justin Post, Merrill – Neutral
  • Jordan Rohan, RBC – $37
  • Jim Friedland, Cowen – Neutral

The Bears

  • Derek Brown, Cantor – Sell – $30
  • Jeetil Patel, DB – Sell – $24

So there you have it.  there’s a spread on the stock from $24 at the low-point to $46 on the high-side.  That’s a $22 delta or nearly 100%.  I haven’t been doing this for all 10yrs of eBay’s life, but I can’t recall a time in the history of the company that the opinions have been so widely divided.  However, you will notice that when you look at it in these three buckets, there is a surprisingly large % of analysts that are in the bull camp.  In this sample set of 12 analysts, we have 7/12 (58%) bullish, 3/12 (25%) waffleish, 2/12 (17%) bearish, so on that measure things are overwhelmingly bullish right now.  I should point out that the stock is testing 52-week lows at $27 so some of the enthusiasm is due to the tempting valuation at this low-point.

I know Heath and Jeetil really well so I don’t think they’ll mind if we dig into their thoughts a little bit and see what golden nuggets are to be found from the eBay Bull (Heath) and Bear (JP).