By Sam Boughedda
eBay (NASDAQ:EBAY) shares are trading higher Thursday, currently up over 2%, after the company beat analyst consensus earnings and revenue estimates.
The e-commerce company's earnings came in at $1.00, $0.07 above the analyst estimate of $0.93, while revenue for the quarter was $2.4 billion versus the consensus estimate of $2.33 billion. Despite the revenue beat, it fell 5% year-over-year, with Gross Merchandise Volume of $17.7 billion also declining, down 11% compared to last year.
During the quarter, the company generated $735 million of operating cash flow and $633 million of free cash flow from continuing operations.
"Our third quarter results demonstrate significant progress against our long-term objectives and exceeded expectations for all key business metrics," said Jamie Iannone, Chief Executive Officer at eBay.
Iannone added that the company has remained resilient despite the challenging macro environment.
Looking ahead, the company sees Q4 earnings between $1.03 and $1.09 per share, versus the consensus of $1.06, with revenue for the period expected to be between $2.42 billion and 2.5 billion, versus the $2.49 billion consensus.
Full-year earnings are expected to be between $4.07 and $4.13, versus the consensus of $4.04, with revenue expected to be in a range of $9.71 and $9.79 billion, versus the consensus of $9.72 billion.
eBay declared a cash dividend of $0.22 per share.
Reacting to the report, BofA analysts said eBay's third-quarter beat shows resiliency in a tough market, but macro and FX are growing headwinds.
"We were encouraged to see eBay report more resilient GMV in 4Q and we continue to view margins as attractive and valuation undemanding at 9.9x our below Street 2023 free cash flow estimates. However, we expect eCommerce market growth to slow in 2023 and eBay to continue to trail overall industry growth," the analysts wrote.
Elsewhere, Morgan Stanley analysts cut the firm's price target on the stock to $33 from $34, telling investors in a note that "both U.S. and Europe GMV trends decelerated notably in October, leading to a second 4Q GMV guidance cut."
"We continue to believe '23 numbers are too high, especially with a worsening U.S./Europe backdrop," added the analysts.