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Strategies & Market Trends : Z Best Place to Talk Stocks
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To: Larry S. who wrote (52768)1/20/2005 7:12:46 PM
From: Kelvin Taylor  Read Replies (1) of 53068
 
EBAY was priced to perfection. The stock was way overvalued and unless the report exceeded expectations it was due for a hard fall. The question the market is looking at is how long can the company maintain the 50%+ growth rates. EBAY has guided down estimates from last October.

"It may be that the years of relatively easy growth are behind the company," says Derek Brown, an analyst at Pacific Growth Equities. Brown pointed to two figures in the report that raise some concern: eBay's gross merchandise volume -- the total amount of goods traded through eBay -- as well as the number of new listings. Both gained by 39% in the fourth quarter."

@ $80 and EPS est of $1.40, PE = 56... still not a dirt-cheap stock, but not as absurd as when it was trading @ $100.

Current Qtr. 66.7%
Next Qtr. 22.6%
This Year 33.1%
Next Year 32.3%
Next 5 Yrs/per annum 35.0%

If the company can grow say at 40-50% for the next 5 years then the stock is fairly valued. Current estimates are in the 30-35% range. I think these darlings of the Street(including GOOG) are risky investments simply because everyone expects only good news to keep them rising in price. EBAY's drop in price makes it a little bit more attractive, but I stress the word little. $60 would be much more of a value, IMO.
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