EBay proves the naysayers wrong -- again

The Internet pioneer was left for dead not too long ago, but it has been on a roll lately with a stock price that looks like it's nowhere near out of gas.

By Jonathan Berr Apr 1, 2013 9:17AM
About five years ago, many pundits thought eBay (EBAY) was a basket case,  an outdated relic of an earlier Internet age. But for the fortunate investors who bought its shares during the bad old days and have held on, the payoff has been huge. EBay's stock price has surged more than 70% since 2008, and most analysts believe it's nowhere near out of gas.
The average 52-week price target on eBay is $60.61, about 11% higher than where it recently traded. It's not exactly a value stock at a price-to-earnings multiple that tops 27, which is a five-year high. But eBay is a bargain compared with rival Amazon.com (AMZN), which trades for more than $260 and has a P/E ratio pegged by Bloomberg topping 240. Moreover, eBay's earnings are expected to rise in the current quarter, and Amazon's are projected to fall.

During eBay's recent presentation to Wall Street analysts, management predicted it could increase its annual profits by 15% to 19% over the next three years, better than what had been expected. The company also is doing well outside the U.S. and has forecast that sales in emerging markets will rise four times current levels in three years.

At a time when companies such as Facebook (FB) are trying to figure out their mobile strategies, eBay is nailing it. This year the company expects to generate $20 billion in mobile commerce and payments volume. EBay plans to expand its same-day shipping service, eBay Now, and CEO John Donohoe recently told Fortune that customers may be able to get goods from its partners delivered within an hour.

And the good news doesn't stop there. By 2015, eBay expects to enable $300 billion in global commerce, up more than 70% from $175 billion in 2012. Payments revenue is expected to surge more than 50% to $21.5 billion during that same time period.  

EBay continues to offer fairly modest risks and potentially high rewards for most investors. Act now before the company silences its critics once again.

Jonathan Berr does not own shares of the listed companies. Follow him on Twitter @jdberr.

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107Comments
Apr 1, 2013 11:38AM
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Except that they have destroyed Ebay for small sellers.
Apr 1, 2013 12:11PM
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Ebay is not really for small people.  They went from being friendly venue for buyers and sellers  to a corporate monster that really just wants to entertain the big sellers.
Apr 1, 2013 10:50AM
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Ebay is a last resort they take a handsome fee for the monopoly they have.
Apr 1, 2013 12:53PM
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Thats because they are now taking 13% of total sale. Use to be 9%. And that includes fees on sale, shipping and paypal fees total. EBay is a turd. They just keep charging more for service
Apr 1, 2013 12:42PM
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Ebay may be good for stock holders but it's a far cry from what it was for small sellers, they "Fee" you to death and have so many restrictions it almost impossible for the small guy to compete. It's only a matter of time before that bites them in the stock prices.

Apr 1, 2013 1:06PM
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eBay used to be a great place to sell goods. I could sell old cameras or stereo equipment and make a profit. eBay's fees were very reasonable and I recommended eBay to my friends.

In the last few years, they've become extremely expensive. Their fees are ridiculous. They recently charged me a $200 "fee" when I sold a camcorder. PayPal then charged me $30.00 for their fee. This was on top of dealing with a buyer who won my auction, but turned out to be a fraud.

When I tried to resolve this issue, eBay stated there was a four day grace period. In the meantime, I wasted nearly a week before I could try and sell the camcorder again. eBay also does not make it easy to resolve problems with buyers. 

eBay used to fun, but it's not anymore.
Apr 1, 2013 9:51AM
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Wait until tax laws change....it's all in the dump then
Apr 1, 2013 1:30PM
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eBay just simply sucks these days!!! They RIP YOU OFF with HUGE fees INCLUDING taking a percentage of the fee the seller charges for shipping causing the seller to have to OVERCHARGE a buyer for shipping so as not to actually lose money on the sale by the time eBay is done gouging the seller!!!!  &  should be ashamed of themselves, but when you are living the phat life by taking advantage of the "little people" and you lack any sort of integrity in your life, I guess it is pretty hard to feel bad, eh?

 

 eBay is also quick to penalize sellers by allowing buyers to negatively impact their feedback scores but doesnt allow sellers to warn other sellers about deadbeat buyers by allowing the seller to leave negative feedback if a buyer doesnt pay or takes forever to pay or is just simply a lousey buy as a lot of buyers on ebay are these days!!!

Apr 1, 2013 1:01PM
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They won't make another penny from me as an Ebay seller. Of the last 5 items I listed on Ebay 3 of the buyers switched the item I sent them and returned something different and asked for a  refund.

 One item wasn't even close what I sent the buyer, I never owned this type item this buyer sent back. Ebay/PayPal said I had to refund their money.

 

Apr 1, 2013 1:32PM
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Remember when it used to be FUN - no the N is gone!

Apr 1, 2013 1:46PM
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Ebay in trouble, how does anyone come up with that line, there making more money then the law allows and to charge a fee for postage is criminal.
Apr 1, 2013 1:43PM
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eBay has become nothing more than a marketplace for STOLEN and SHOPLIFTED GOODS these days!!!! In addition, eBay has made their site so user friendly for the DISHONEST buyer to RIP-OFF the honest seller!!!! A garage sale would be easier and safer for a seller these days than ebay would be!!!!

 

HEY EBAY, YOU SUCK!!!!!!!!!!!!!!!

Apr 1, 2013 1:31PM
Apr 1, 2013 1:40PM
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Ditto Billy77
Ebay has forced small sellers to refund sales to complainers regardless of their own fault.
If you want something for free, just buy on Ebay, raise a stink and Ebay will refund your money and let you keep the item as well. This is a formula for failure to lure sellers and an opportunity for every
scammer out there. There are sites that are up and comers and advertised on TV. Ebay will go the way of AOL, when people realize its not the only thing out there to sell on, and without the unfair practices. 
Apr 1, 2013 1:44PM
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$25. a share is something to rave about????  Must be a slow Monday at MSN, who by the way is tied into Ebay financially. Hhhmmmmmm.
Don't buy Ebay stock or listen to the media whores who are promoting a false narrative about Ebay.
Ebay will never be what it once was, and what you see is a bubble that will burst big when it does.
Remember AOL????? 
Apr 1, 2013 1:20PM
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We have recently tried to sell items on ebay.  With the tech industry being ruined because of the ecommerce tech sites, profit margins are already low.  So we figured out how to make some money selling our computers.  Then I figured out the fees that we were going to incur.  We did sell one computer and, because the customer upgraded items, we made some money but the profit margin was slim (single digit %).  We made less than $50 on the system prior to the upgrades because we had to do free shipping to be competitive.  The system sold for $700.  I have 2 systems listed now, didn't adjust their price much from what we normally sell them for, and put it as it lists until sold.  It's been 30 days and nothing.  The only items that I have had any real luck selling are items that I don't need and bought in by accident.  And when I list those items I put them at a price so low so they will sell.  I end up losing money on them but it is better than the item colleting dust because I will never use it.
Apr 1, 2013 2:04PM
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For investors it's great, but for little sellers we went in the toilet.  I tried to sell my items, but with all the associated fees I had to pull the plug quickly.  I really got tired of no bids, or a single winning bid at the .99 cent level. I finally deleted my account, and paypal as well.  I'll go back to having a garage sale annually. 
Apr 1, 2013 2:02PM
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I feel raped every time I sell on ebay they even fee you on your shipping costs.
Apr 1, 2013 1:59PM
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Since their fee and rate structure went out of sight, I will NEVER use Ebay again. I'll just hang on to my stuff and have a sale at home. Especially since selling on Ebay will soon be liable to income and sales taxes universally.
Apr 1, 2013 2:03PM
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I don't use it anymore there it is no only for big sellers and got robbed by paypal thus I am using Amazon there you know where you stand and don't get ripped of like ebay 
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