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Why eBay Stock Popped Today

Steve Symington, The Motley Fool
Updated

What happened

Shares of eBay (NASDAQ: EBAY) were up 5.5% as of 11:00 a.m. EDT Thursday after the online marketplace announced better-than-expected second-quarter results, raised its full-year earnings guidance, and confirmed it's mulling whether to sell its StubHub and Classifieds businesses.

On the former, eBay's quarterly revenue climbed 1.8% year over year to $2.687 billion -- near the high end of guidance for between $2.64 billion and $2.69 billion -- and adjusted earnings increased 10.5% to $589 million. With the help of eBay's massive stock buybacks over the past year, adjusted earnings per share rose 28.3% to $0.68, well above its target range of $0.61 to $0.63.

eBay front desk in Korea office.
eBay front desk in Korea office.

IMAGE SOURCE: EBAY.

So what

"We remained focused on building our active buyer base, delivering outstanding customer experiences, and accelerating our growth initiatives in the second quarter," added eBay CEO Devin Wenig.

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To be sure, eBay's active buyer base grew 4% to 182 million, its new payments platform saw gross merchandise volume increase 24% from last quarter to $270 million, and revenue from more than 940,000 sellers now using its new first-party advertising platform (up from 800,000 last quarter) grew 130% year over year to $89 million.

eBay also used its earnings press release to confirm recent reports that it's "actively reviewing the role of StubHub and Classifieds [...] to determine the best path forward to maximize shareholder value."

Now what

Looking ahead to the full year, eBay told investors to expect 2019 adjusted earnings per share of $2.70 to $2.75, up from $2.64 to $2.70 previously. On the top line, it now sees 2019 revenue arriving between $10.75 billion and $10.83 billion, which technically represents a reduction from its old range (of $10.83 billion to $10.93 billion), but essentially marks a reiteration of its estimate for organic currency-neutral growth of 2% to 3%.

More From The Motley Fool

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has the following options: short October 2019 $37 calls on eBay and long January 2021 $18 calls on eBay. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.