eBay Inc (NASDAQ:EBAY), a global commerce leader, today reported that gross merchandise volume (GMV) for the quarter ended December 31, 2015 was $21.9 billion, increasing 5% on a foreign exchange (FX) neutral basis and was flat year over year on an as-reported basis, reflecting the continued impact of a strongU.S. dollar. Revenue for the quarter was $2.3 billion, up 5% on an FX-Neutral basis and flat year over year on an as-reported basis, driving non-GAAP net income from continuing operations of $600 million, or $0.50 per diluted share, and GAAP net income from continuing operations of $523 million, or $0.43 per diluted share. During the quarter, the company generated$1.1 billion of operating cash flow from continuing operations and $1.0 billion of free cash flow from continuing operations.eBay also repurchased $550 million of its common stock and completed the divestiture of its Enterprise business onNovember 2, 2015.
“We delivered solid fourth quarter results and continued to make progress against our key priorities,” said Devin Wenig, President and CEO of eBay Inc. “The quarter also marked the end of an extraordinary year during which we completed the spin-off of PayPal. We continue to grow our business and customer base while executing our plan to reposition eBay for long-term success.”
Underlying total eBay Inc. performance, the Marketplace platform delivered $20.7 billion of GMV, resulting in $1.9 billion in revenue for the fourth quarter, up 1% on an FX-Neutral basis and down 3% on an as-reported basis. During the 2015 holiday shopping season, the Marketplace platform saw over 265 million transactions across 190 markets, as consumers around the world shopped for great deals and sought-after gifts. StubHub ended the year with strong momentum, driving GMV of $1.2 billion in the fourth quarter and $232 million of revenue, up 34%, aided by strength in the sports and concerts categories. Classifieds delivered another quarter of accelerating growth with revenue of $183 million, up 15% on an FX-Neutral basis and up 2% on an as-reported basis with strong performance in Germany and the United Kingdom.
For the full year 2015, eBay Inc.’s commerce platforms continued to connect buyers and sellers around the world, with an active buyer base that grew by 8 million, to 162 million total active buyers, representing 5% growth. Total GMV was $82 billion, up 5% on an FX-Neutral basis and down 1% on an as-reported basis, reflecting the impact of a strong U.S. dollar. Revenue was $8.6 billion, growing 5% on an FX-Neutral basis and down 2% on an as-reported basis. The company delivered strong operating and free cash flow on a continuing operations basis, generating $2.9 billion and $2.2 billion, respectively, during 2015.
The results of eBay Enterprise and PayPal are presented as discontinued operations, appearing net of tax in a single line in the company’s statement of income.
|Fourth Quarter and Full Year 2015 Financial Highlights (presented in millions, except per share data and percentages)|
|Fourth Quarter||Full Year|
|GAAP – Continuing Operations|
|Income (loss) from continuing operations||$523||$729||$(206)||(28)%||$1,947||$(865)||$2,812||**|
|Earnings (loss) per diluted share from continuing operations||$0.43||$0.59||$(0.16)||(26)%||$1.60||$(0.69)||$2.29||**|
|Non-GAAP – Continuing Operations|
|Net income (loss)||$600||$685||$(85)||(12)%||$2,232||$2,386||$(154)||(6)%|
|Earnings (loss) per diluted share||$0.50||$0.55||$(0.05)||(10)%||$1.83||$1.89||$(0.06)||(3)%|
Other Selected Financial and Operational Results
- Operating margin — GAAP operating margin decreased to 28.5% for the fourth quarter of 2015, compared to 31.5% for the same period last year. Non-GAAP operating margin decreased to 34.4% in the fourth quarter, compared to 36.7% for the same period last year.
- Taxes — The GAAP effective tax rate for continuing operations for the fourth quarter of 2015 was 19.5%, compared to 1.2% for the fourth quarter of 2014. The non-GAAP effective tax rate for continuing operations for the fourth quarter of 2015 was 23.8%, compared to 20.3% for the fourth quarter of 2014.
- Cash flow — The company generated $1.1 billion of operating cash flow from continuing operations and $1.0 billion of free cash flow from continuing operations during the fourth quarter of 2015.
- Stock repurchase program — The company repurchased approximately $550 million of its common stock, or 19.9 million shares, in the fourth quarter of 2015. The company’s total repurchase authorization remaining as ofDecember 31, 2015 was $1.8 billion.
- Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $8.5 billion as of December 31, 2015.
- First quarter 2016 — The company expects net revenue between $2.05 billion and $2.10 billion, representing FX-Neutral growth of 3% – 5%, with non-GAAP earnings per diluted share from continuing operations in the range of $0.43 -$0.45 and GAAP earnings per diluted share from continuing operations in the range of $0.37 – $0.39.
- Full year 2016 — The company expects net revenue between $8.5 billion and $8.8 billion, representing FX-Neutral growth of 2% – 5%, with non-GAAP earnings per diluted share from continuing operations in the range of $1.82 – $1.87and GAAP earnings per diluted share from continuing operations in the range of $1.55 – $1.60.(Original Source)
Shares of Ebay are down nearly 10% to 23.88 in after-hours trading. EBAY has a 1-year high of $66.73 and a 1-year low of $23.23. The stock’s 50-day moving average is $27.03 and its 200-day moving average is $27.17.
On the ratings front, Ebay has been the subject of a number of recent research reports. In a report issued on January 24, RBC analyst Mark Mahaney maintained a Hold rating on EBAY, with a price target of $30, which implies an upside of 13.6% from current levels. Separately, on January 22, Cantor Fitzgerald’s Youssef Squali reiterated a Hold rating on the stock and has a price target of $27.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Mahaney and Youssef Squali have a total average return of 18.4% and 13.8% respectively. Mahaney has a success rate of 57.1% and is ranked #11 out of 3607 analysts, while Squali has a success rate of 56.2% and is ranked #28.
Overall, 4 research analysts have assigned a Hold rating and 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $33.57 which is 27.1% above where the stock opened today.
eBay Inc is a commerce platform and provides online marketplaces for sales of goods. The Company’s business segments are Marketplaces, Payments and Enterprise.