Not Every Tech Stocks are Equally Strong: eBay
eBay stocks are traded at 50% of their peaks in 2021. The company was once the hot stock on Wall Street but since that time, few investors were expecting these stocks to rapidly expand. However, the pandemic boosted the company’s business, while the elevated demand for collectibles (Pokemon cards) contributed to bring the platform’s turnover to a new high over the last years. The company’s management used the situation to expand eBay business and introduce its own payment system.
The platform’s turnover dropped 17% year-on-year to $19.4 billion in Q1 2022. The turnover rose marginally before the pandemic – by 7% in Q1 2019 compared to 29% in Q1 2021. Now it seems that the pandemic effect was a single shot, and now it is fading away. Revenues dropped by 5% year-on-year to $2.35 billion in Q1 2022, while the 2022 revenue forecast was downgraded to $9.6-9.9 billion down by 3-6% vs $10.3-10.5 billion up by 0-3% previously expected.
Removing pandemic restrictions would likely have a much more negative effect on the e-commerce than expected before. By themselves collectibles would not provide turnover growth at the same high rates as Amazon but they are certainly strong leaders in other segments of e-commerce. So, investors should think twice before adding EBAY stocks to their portfolios.