Morgan Stanley's Mary Meeker ups E_BAY to strong buy.............
7 10:52 T =Morgan Stanley, EBay, Amazon -2: Firm Ups eBay Earns View
NEW YORK (Dow Jones)--Morgan Stanley analyst Mary Meeker reiterated her
outperform ratings on eBay Inc. (EBAY) and Amazon.com Inc. (AMZN) after the two
online retailers posted better-than-expected fourth-quarter results late
Tuesday.
eBay - which runs an online auction site that links people trying to buy and
sell everything from coins to computers to Beanie Babies - reported operating
earnings of 7 cents a diluted share on $19.5 million in revenue in the fourth
quarter. That's up from 1 cent a share on $2.6 million in revenue in the fourth
quarter of last year and above the consensus estimate of 4 cents a share for
the latest quarter.
eBay also declared a 3-for-1 stock split.
In a research note, Meeker said eBay's fourth-quarter results showed strong
growth in all of the company's key metrics.
Gross merchandise sales, the total value of goods traded on its site, rose
57% to $307 million in the quarter from $195 million in the third quarter. The
company hosted more than 13.6 million auctions during the fourth quarter, up
from 9.2 million in the third quarter. And registered users climbed 72% to 2.2
million.
Meeker lifted her earnings estimates on eBay to 25 cents a share from 17
cents for 1999, to 53 cents from 39 cents for 2000 and to 69 cents from 64
cents for 2001. eBay posted operating earnings of 21 cents a diluted share for
1998.
The analyst said that while eBay's shares, which have risen 1,127% since its
initial public offering in September, will continue to be very volatile, "we
are in for the long haul."
Calling eBay "the world's leading personal trading community," Meeker said
the company's market opportunity is huge.
She noted that eBay's users now list more than 1.3 million items in more than-
1,000 catagories. Since the company was founded, she added, more than 43
million items have been placed for sale and more than 158 million bids have
been made on the service.
"We believe that impressive value will accrue to a handful of powerful
"Internet exchanges" like eBay," she said.
Meeker also maintained that eBay is "doing quite well" against a new
competitor that is a joint venture of Onsale Inc. (ONSL) and Yahoo¦ Inc.
(YHOO), Yahoo¦ Auctions. The analyst added that she does not expect a new
service planned by Sotheby's Holdings Inc. (BID), Sothebys.com, to have a
material impact on eBay since it will target a narrower, more expensive market.
(MORE) DOW JONES NEWS 01-27-99
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