What is eBay?
eBay is an e-commerce company that operates in 190 markets worldwide. eBay is one of the largest online marketplaces globally & it operates as a platform connecting buyers & sellers across various categories including electronics, fashion, collectibles & art, sports, health & beauty, industrial equipment, home & garden & more.
What is an eBay auction?
Customers can buy online products directly from the site or they can either participate in auctions. During an auction period buyers can place bids on the item & the highest bidder at the end of the auction wins the item & is obligated to complete the purchase.
Who founded the eBay?
eBay was founded by Pierre Omidyar in 1995. eBay has 134 million active users now & last year it handled $74 billion in transactions.
What is the relationship between PayPal & eBay?
In 2002, eBay acquired PayPal for $1.5 billion in stock & from 2002 to 20115 PayPal was the primary payment gateway for eBay transactions. In 2015, eBay & PayPal split into two separate public companies & after that eBay started to diversify its payment options into credit & debit cards, Apple Pay, Google Pay, bank transfers & checks.
Today PayPal continues to be one of the payment options on eBay, though it no longer holds the primary payment position.
How much money does eBay make?
The total revenue of the company in FY 2023 is $10 billion. The revenue of the company has increased from $8.9 billion in 2020 to $10 billion in 2023. The gross profit of the company is $7.3 billion which gives a gross profit margin of 73%. A gross profit margin of 73% shows how strong their business model is. eBay is operating under low-cost metrics.
The net profit of the company is $2.7 billion & net profit margin is 27%. The main issue with net profit is that the company was unable to sustain its net profit over the past couple of years.
In FY 2022 the company recorded a loss of $1.2 billion. In FY 2021 the company recorded a massive net profit of $13.6 billion. Value investors’ unstable & constantly changing earnings cause the problem of predicting their future earnings. So, we have to do a deep analysis to predict their future earnings.
The earnings per share of the stock is $5.22 for FY 2023.
How much an eBay stock (EBAY)?
The eBay share is currently trading for $52 per share & PE of 10. PE of 10 means with current earnings you can recover your initial investment within the next 10 years. The only catch here is that earnings need to be stable or grow.
The company is paying a $1.08 dividend per share which represents a dividend yield of 2.07%. With the current market condition PE of 10 & dividend yield of 2% are good signs.
How many assets & equity does the company have?
The total assets of the company for 31st December 2023 stand at $21.6 billion & shareholders’ equity is $6.4 billion. The total liabilities of the company are $15.2 billion. The debt-to-equity ratio is 2.37. The company owes 2.37 times its equity to its creditors. It is not a good sign with such a company & having this much leverage sometimes causes troubles if the economy hits bad situations.
Who owns the company now?
Vanguard Group is the largest shareholder of the company & they own 12.44% of the company. Jamie Lannone is the current President & CEO of the company & he runs the day-to-day operations of the company.
