eBay stock price direction - investor sentiment to recover ?

Chad · Member

Are eBay's days of cheap and easy growth behind it? Much of eBay's early growth came via word of mouth, but now the company is having to pay to grow. A few weeks ago, eBay got hammered because of concerns regarding a slowdown in revenues. Will it rebound?

(PRWEB) February 19, 2005 -- Yes: Merrill Lynch said it expects investor sentiment towards eBay stock to recover in the second half of 2005 as returns from the company's investment in PayPal become visible. "We think investors will increasingly appreciate the opportunity for PayPal to capture a bigger piece of the more than $150 billion off-eBay 2005 e-commerce market," Merrill said. EBay should experience less volatility from e-commerce competitors such as Amazon.com and Shopping.com, Merrill said, adding that eBay shares should see less selling pressure from investors rotating to other stocks. Merrill estimates fiscal 2005 and 2006 earnings per share for eBay of $1.52 and $1.95, respectively. The firm said eBay shares are currently trading at 40 times the 2006 earnings-per-share estimate. "This valuation is near the bottom of eBay's historical valuation over the past three years," Merrill said.