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.
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