eBay Inc.'s stock suffered a significant decline in value on Thursday, following weaker than anticipated guidance pertaining to the all-important holiday shopping quarter. The company is estimating fourth-quarter adjusted earnings per share (EPS) to range between $1.17 and $1.22, and revenue predictions are set between $2.53 billion and $2.59 billion. This has led to some unease, as analysts (using data from Visible Alpha) anticipated figures of $1.21 and $2.58 billion, respectively.
In the third quarter, edited earnings per share (EPS) were recorded at $1.19, with a 3% year-on-year increase in revenues that totaled $2.58 billion. Additionally, gross merchandise volume (GMV) witnessed a 2% increment, touching $18.31 billion. It is worthy of noting that all the aforementioned figures surpassed previous forecasts.
However, in light of the recent results, analysts from Jefferies indicated that they are revisiting their model. The analysts perceived some growing vulnerabilities and cautioned about potential challenges in future growth, especially if there is no considerable acceleration in fourth-quarter GMV. Analysts from Deutsche Bank reiterated the concerns, stating that the lackluster GMV growth outlook hampers assurance in eBay's potential for expansion.
Despite the 8% plunge in late-morning stocks, eBay’s shares have increased by approximately a third throughout the year.