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HenryTo
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Joined: 06 Aug 2004
Posts: 11734
Location: Los Angeles, California
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 Posted: Thu Apr 19, 2012 4:28 pm Post subject: |
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Morningstar on EBAY's 1Q earnings.
| Quote: | | EBay's increasing relevance in global commerce was on display once again during the first quarter, with key metrics in the core marketplace and payment businesses continuing to head in the right direction and details about new offline PayPal point-of-sale tests and new mobile shopping innovations reinforcing the strong growth opportunities that lie ahead. Based on strong first-quarter results and management's 2013 revenue and segment-level profitability targets ($6.5 billion-$7.0 billion and 25%-26% for PayPal, $7.5 billion-$8.0 billion and 38%-42% for marketplace, $1.2-$1.3 billion for GSI) that are starting to look increasingly achievable, if not outright conservative, we plan to add a few dollars to our $42 fair value estimate. We don't believe PayPal's potential in the greater commerce landscape has been fully appreciated by the market, and even aft er a sharp rise in the stock price Thursday morning, we continue to view the shares as undervalued (currently trading at just under 13 times our 2013 adjusted earnings per share estimate and an enterprise value/adjusted EBITDA multiple of roughly 10 times). PayPal started out of the gates strong in 2012, with currency-neutral revenue increasing 31% due to a 25% increase in total payment volume ($33.9 billion) and a 24-basis-point increase in the take rate (stemming from a mix shift toward Bill Me Later payments and cross-border transactions). More important, PayPal's profitability remained healthy despite numerous infrastructure investments, with segment-level margins coming in at the highest point in five years (26.4%, a 410-basis-point jump year over year) and continue to track ahead the high end of management's 2013 objective (24%-26%). EBay's marketplace segment also posted strong currency-neutral top-line growth of 13%, driven primarily by a 13% gain in nonvehicle gross merchandise volume ($16.2 billion) and an acceleration in active user growth (which grew 6.8% year over year to 102.4 million users). In our view, the key highlight from this segment was the notable strength in several categories where the company has made website enhancements in recent years, including fashion, tickets, and parts/accessories. Marketplace segment-level operating margins declined 180 basis points to 38.7%, but were largely the result of increased technology and marketing investments. Coupled with solid contribution from GSI (which posted 15% growth on strong volume), the end result was EPS of $0.55 (adjusted for one-time items), a few pennies above consensus expectations. Management's updated 2012 guidance, which added $100 million to the previous top-line forecast range (now set at $13.8 billion-$14.1 billion for the year) and $0.05 in non-GAAP EPS (bringing the outlook to $2.30-$2.35), appears reasonable in our view. We plan to adjust our estimates accordi ngly and will probably maintain modestly more aggressive estimates than management has forecast, given continued market share gains from PayPal and increased traction in the marketplace segment. |
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HenryTo
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Location: Los Angeles, California
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11734
Location: Los Angeles, California
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11734
Location: Los Angeles, California
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| Posted: Fri Jul 01, 2011 12:20 pm Post subject: |
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Morningstar on the Durbin Amendment's impact on PayPal's business:
| Quote: | | Earlier this week, as part of revisions to the Durbin Amendment (which regulates interchange fees between retailers and financial institutions), the Federal Reserve asserted that third-party payment systems that do not route transaction information--like PayPal--are not considered to be payment card networks, and therefore are not subject to interchange regulation. We had considered the potential for PayPal regulation to be a low-probability event, but we believe this development nonetheless mollifies much of the recent overhang on PayPal's margin potential, though language in the revised provisions leaves the door open for mobile payment regulation. There is no change to our valuation assumptions for eBay EBAY or its PayPal business following this announcement, and we will leave our $42 fair value estimate intact. Even after a modest rally following the announcement, we believe eBay's shares offer attractive value at 14 times our 2012 earnings per share estimate, an enterprise value/EBITDA multiple of 10 times, and a free cash yield of 7%. Revisions to Durbin interchange regulation calls for a $0.21 cap on fees that retailers are charged to accept debit card transactions plus a $0.01 conditional charge and 0.05% of the transaction for fraud prevention. On the whole, this new proposal is a meaningful decrease from current fees of around $0.44 per transaction, though not as significant as $0.07-$0.12 cap proposals from the Fed last year. This development is a positive for eBay and much of our retail coverage universe, as merchants will incur lower fees on debit-funded transactions (though we note that new regulations will also reduce the fees eBay collects on its PayPal debit cards). We continue to anticipate healthy growth at PayPal; we are maintaining our five-year forecast calling for average annual revenue growth of 20% and segment margins growing to around 25% from 21%. Merchant services and Bill Me Later probably will be the primary growth engines for this segment, particularly as eBay expands its larger retail client base and broadens its mobile e-commerce offerings. We still find management's 2013 revenue target of $6 billion-$7 billion for PayPal achievable, though success also will depend on other marketplace growth initiatives. |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
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| Posted: Fri Mar 18, 2011 7:34 am Post subject: |
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Yup....I may have been looking in the wrong place for that new banking system to the poor at WalMart. Ebay's got it. Got it now in spades. Morningstar goes right to the PayPal bottom line....and what a profit center that one is!
http://www.paypalsucks.com/
Ebay's a finance company.
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HenryTo
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Location: Los Angeles, California
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| Posted: Fri Feb 11, 2011 6:30 pm Post subject: |
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Morningstar on EBAY's latest investor meeting:
| Quote: | | At an investor meeting Thursday, eBay unveiled aggressive medium-term growth aspirations, including a three-year revenue target of $13 billion-$15 billion, compound annual earnings growth of 10%-14% (excluding one-time items), and a free cash flow target of $7.5 billion-$8.5 billion over 2011-13. Based on 2010 revenue of $9.2 billion and non-GAAP earnings per share of $1.73, these targets imply annual average top-line growth of 12%-18% and 2013 earnings per share of $2.30-$2.56. Within its 2013 revenue goal, management expects PayPal to contribute $6 billion-$7 billion (20%-27% annual growth based on 2010 revenue of $3.4 billion), while the marketplace segment expands into a $7 billion-$8 billion business (7%-11% annual growth based on 2010 revenue of $5.7 billion). Though management's targets are directionally consistent with our favorable view of PayPal's market share opportunities and increased marketplace revenue contribution from expanded fixed-price offerings, the implied growth rates are well ahead of our current projections, which include average revenue growth of 7% and earnings per share growth of 9%. We are putting our fair value estimate under review as we reassess our long-term cash-flow projections. Primarily driven by new mobile commerce technology innovations and market share gains stemming from its impressive network effect, we find management's 2013 revenue target for PayPal aggressive yet ultimately achievable, at least at the low end of the range. However, for PayPal to reach $7 billion in revenue by 2013, we believe the company must improve public perception, trust, and relationship with third-party marketplace sellers, as PayPal is partly tied to the fortunes of eBay. Though we expect marketplace segment re venue to benefit from increased fixed-price transaction volume over the next few years, a full turnaround in this segment remains a wait-and-see story. EBay has enjoyed regained traction in some categories like fashion apparel over the past year, but it is too early to tell whether platform upgrades will translate into universal improvement. We're a bit skeptical of the three-year marketplace growth objectives upon our initial review, but if management succeeds in its plans, it would put the company on pace to meet the targets laid out in our upside scenario analysis. |
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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| Posted: Thu Feb 10, 2011 1:00 pm Post subject: |
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Getting in on the smartphone trend with "instant sell" on your smartphone, $250 now ($450iPhone4).
Ebay.....the internet's pawnbroker???
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu Jan 20, 2011 10:40 pm Post subject: |
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Morningstar on EBAY's 4Q and full-year results:
| Quote: | | EBAY finished 2010 in strong fashion, driven by continued strength in payment volume (up 22% for the quarter) and modestly better-than-expected core merchandise volume (up 5% in the United States and 9% internationally on a currency-neutral basis, excluding vehicles). The results reinforced our view that PayPal will remain the dominant player in online payment processing for the foreseeable future, but we believe the increase in gross merchandise sales growth in the marketplace segment will fall short of industry online sales trends for the quarter, validating our worries about retail transaction market share losses over the next few years. Full-year operating margins were 22.4%, and we believe the company remains on track to gradually improve operating margi ns to 23% over the next few years due to continued growth at PayPal. We plan to make a few minor revisions to our near-term model assumptions, as management's 2011 forecast for $10.3 billion-$10.6 billion in revenue (implying 13%-16% growth) and non-GAAP earnings per share of $1.90-$1.95 (10%-13% growth year over year) came in just ahead of our estimates and appears realistic, based on current momentum. However, our long-term assumptions remain intact, and we will leave our fair value estimate unchanged. Trading a little more than 15 times management's 2011 earnings outlook and an enterprise value/EBITDA of just over 10 times, the shares appropriately reflect eBay's collective online payments and transaction growth opportunities, in our view. |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
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| Posted: Thu Jul 22, 2010 2:01 pm Post subject: |
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PayPal is a bank with a large free float and no customer service to pay for. The rewards system helps ease the over-ratcheted fees for the home seller.
Watch out for the "Health Bill" 1099 $600 implementation. It just might split the site.
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu Jul 22, 2010 11:18 am Post subject: |
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Morningstar on EBAY's 2Q results:
| Quote: | | EBay's second-quarter results confirm our theses that PayPal is poised to benefit from the growth in e-commerce around the globe and that eBay will remain a top e-commerce destination. We're sticking with our fair value estimate and continue to think the shares are attractive at our 5-star price. Driven by strong growth at PayPal and improved performance at the core marketplace segment, overall internal revenue (adjusted for changes in currency rates and the sale of Skype) grew 13% in the quarter, on par with our full-year expectations. Total payment volume at PayPal increased 28%, as the company continues to gain market share of online transactions, a trend we expect to continue. At the core marketplace segment, auction and vehicle volume declined 6% and 4%, respectively, but the rate of decline appears to have stabilized. Growth in fixed-price transactions (54% of volume) remained strong at 15% (excluding the acquisition of Gmarket), leading to 4% internal growth in total marketplace volume for the quarter. EBay's quarterly overall operating margin was 22%, comparable with our forecast over the next two years. |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
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| Posted: Thu Mar 18, 2010 6:59 am Post subject: |
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"Feebay" has struggled in china 'til now, flailing behind Yahoo (which went local), and it's American identity will not serve it any better than Google. The monied-class in china don't seem to like buying used stuff and 6% cut between PayPal and Ebay will be skirted at every turn. Additionally this kind of cut is unlikely to serve micro-payments. Ebay in china has been a false note 'til now and I don't see any reason to change. Remember, shopping can be a ritual.
Best argument for Ebay is american states' money grab taxing Amazon. If the NY model goes through look for big shift to ebay. Dell, Sears....already do this. And the software is finally getting really good.
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HenryTo
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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| Posted: Fri Jul 10, 2009 2:07 pm Post subject: |
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GM to auction cars on ebay, cutting out the middleman? We'll see what left of franchise laws.
Old GM up 30% today--maybe it's not a short squeeze. There's just may be some value to that golf course--and five brands, after all. 
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HenryTo
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Location: Los Angeles, California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11734
Location: Los Angeles, California
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| Posted: Tue Apr 14, 2009 3:11 pm Post subject: |
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eBay plans Skype IPO in first half of next year:
| Quote: | EBay plans IPO for Skype, citing limited synergies
EBay to spin off Skype with initial public offering, citing limited synergies
Tuesday April 14, 2009, 5:05 pm EDT
NEW YORK (AP) -- EBay Inc. plans to spin off its Internet communications service Skype through an initial public offering.
San Jose, California-based eBay expects to complete the IPO in the first half of next year, though it says the timing will be based on market conditions.
EBay bought Skype for $2.6 billion in October 2005. It took a major writedown on the business in 2007, essentially acknowledging it had drastically overvalued it.
In a statement, Chief Executive John Donahoe says it's clear Skype has "limited synergies" with eBay's online marketplace and with its payment service, PayPal. |
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