I would be careful with eBay here.
The fact is that eBay's growth has slowed down DRAMATICALLY.
This current quarter typically shows their largest sequential growth, and guess what?
There simply isn't much growth so far over the Christmas quarter.
Today, eBay increased its basic listing fees by about 10 percent.
This is a sign that eBay can depend less on volume growth, and is trying to squeeze to grow by raising prices.
Sure, eBay can get away with it, but it doesn't really buy them much, and it certainly does not buy them increased volume, which is the true sign of health.
And, as others have pointed out, a substantial portion of eBays earnings are interest on its cash - again, not a sign of health, and certainly not enough to justify the market capitalization.
eBay has a decent business, but the big growth, on which their high P/E is based, is gone.
I would be surprised to see eBay's revenues grow 25 percent this year - not the kind of business that deserves a huge P/E. |
