eBay (EBAY Stock) – Share price falls ahead of August 11 earnings report

eBay Inc. ( #eBay ) – The long-standing e-commerce company with a market capitalization of $45 billion is due to report quarterly revenue for the end of June on Wednesday, Aug. 11, after the market close. Zacks is forecasting sales of $3.01 billion, higher than the same quarter last year which was $2.87 billion (or up 5.01%), while the return per share is expected to be $0.96, lower than the same quarter last year which was $1.08 (or -11.11%).

For the past quarter, sales were $3.02 billion, compared with a $2.97 billion forecast, as well as a return on equity of $1.09 versus a $1.07 forecast. However, eBay’s share price fell more than 10% after reporting earnings. On April 28, shares were downgraded by Wedbush and Susquehanna in view of the progress of the Covid-19 vaccination program.

The highlight of the first quarter was the fact that eBay reached 4 million merchant subscribers worldwide, with over 80% of transactions being made in the US. As well as making the payment system easier and giving sellers an easier way to manage their business and more options for payment methods, the company reduced unpaid fixed-price transactions by more than 80% and promoted listings generated over $224 million in revenue in the first quarter, an increase of 64%.

However, due to the progress of the vaccination program and relaxation of lockdown measures purchasing force is returning to the general retail sector again. That means online retail sales may not be as booming as in the previous quarter.

As for the share price of the company, it was up 30.05% at the latest close of $65.35, a sharp drop with a bearish divergence from the 52-week high of $74.13 and a drop past the MA50, making the $60.00 MA200 a target. If this week’s earnings report comes out below market expectation this downtrend may continue, while if the report comes out good the first target will be the MA50 zone at $67.50 and the next target the original high at the $74.00 zone.

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