Jefferies analyst John Colantuoni expresses concern about eBay's advertising growth slowing down significantly in 2024, dropping from 23% in Q4 2023 to just 4% in Q2 2024. This decline poses risks for both gross merchandise value and EBITDA, as slowing growth will limit margin and reinvestment capabilities. Colantuoni emphasizes, 'We expect slowing advertising growth to eliminate a key source of margin and reinvestment capabilities, resulting in downside to both gross merchandise value and EBITDA.'
After downgrading eBay stock to Underperform and lowering the price target to $52, analyst John Colantuoni highlights how the recent slowdown in China, which accounts for 10% of eBay's revenue, eliminates an important growth tailwind. This was vital for eBay's future prospects and adds to the challenges the company faces in maintaining its growth trajectory.
Wedbush's Scott Devitt maintains a Neutral rating for eBay, with a price target of $70. He projects mid-single digit earnings-per-share growth driven by margin improvements and share buybacks. Devitt notes, 'Our model implies mid-single digit earnings-per-share growth over the next five years supported by margin gains and share buybacks as the company remains committed to returning capital to shareholders.'
The consensus recommendation on eBay remains Hold among Wall Street analysts, with average target prices around $61.94 suggesting limited upside. While some analysts express confidence in eBay's long-term strategies, they remain cautious due to the lack of near-term growth catalysts.
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