EBay Gains After Upgrade
By Eric C. Fleming
Inter@ctive Investor
April 27, 1999 8:25 AM PT
Shares of eBay Inc. (Nasdaq: EBAY) rose 5 1/4 to 214 1/4 on Tuesday after the online auctioneer topped expectations for its first quarter.
Earlier this morning, Salomon Smith Barney raised its rating on eBay to "buy" from "outperform" and BancBoston Robertson Stephens and Donaldson Lufkin & Jenrette reiterated their respective "buy" opinions. DLJ raised its six to twelve-month share price target at $300 a share.
Goldman Sachs, one of the underwriters for eBay's IPO, raised 1999 estimate to 22 cents a share and 2000 expectations to 37 cents a share. DLJ also boosted expectations to 23 cents a share from 8 and 37 cents a share from 18 cents a share. First Call is looking for 8 cents in earnings this year and 18 cents in the following year.
Goldman also hoisted sales estimates to $180 million in 1999 and $260 million in 2000. DLJ advanced its sales forecast for this year to $181.1 from $127.5 million and raised its 2000 revenue target to $262.5 million from $185 million.
eBay easily hurdled analysts' estimates in its first quarter Monday, returning a profit of $5.9 million, or 5 cents a share, on sales of $34 million. First Call consensus expected the online auctioneer to earn 2 cents a share in the quarter.
"eBay over-delivered on every key metric," said DLJ analyst Jamie Kiggen in a report.
Company officials said much-improved traffic growth contributed to the upside surprise. Many analysts were expecting revenue of about $26 million. The $34 million in sales represents a stunning 469 percent jump compared to the year-ago quarter when it earned $569,000, or 1 cent a share, on sales of $6 million. It was also more than $8 million higher than most analysts expected.
"A lot of people have been focusing on Amazon and its auctions, but eBay is totally focused on the business," said Goldman Sachs analyst Rakesh Sood. "EBay will continue to do very well."
On a conference call with analysts, CFO Gary Bengier said gross margins would decline in the second quarter because of its acquisition of upscale auctioneer Butterfield & Butterfield.
In related news, Amazon.com bought three Internet companies for a total of $645 million, which add to its online bookselling and e-commerce business. |
