eBay's GMV Forecast Reduced After Q3 Results, Analyst Sees Softness In UK And Germany

Benchmark analyst Daniel L. Kurnos reiterated a Buy rating on eBay Inc EBAY, lowering the price target to $56 from $60. 

In the recently reported Q3 results, the company's revenue rose 5% Y/Y on reported and FX basis to $2.500 billion, marginally missing the consensus of $2.502 billion. 

3Q GMV of $17.99 billion was modestly ahead of consensus, with the outperformance coming in about equal parts between the U.S. and International, the analyst notes. 

Revenue was only in line, however, as FX headwinds and a more sluggish q/q improvement in advertising more than offset improving scale benefits from eBay international shipping (eIS), resulting in a slight sequential decline in the take rate, Kurnos adds.

The biggest challenge for eBay from here, in the analyst's view, is how to think about 2024. 

Whether out of an abundance of caution or lack of visibility (or both), management refused to talk about the top line, instead committing to what they know they control (costs), the analyst adds.

Given the 4Q guidance and underlying softness in the U.K. and Germany in particular, the analyst reduced the 2024 GMV forecast by almost 4% to flat y/y. 

Kurnos has also reduced the expected take rate expansion by ~20bps, given more modest scale assumptions. 

As a result, the EBITDA comes in by roughly $60 million, although margin projections remain largely intact, the analyst adds.

Price Action: EBAY shares are trading lower by 2.62% to $39.70 on the last check Wednesday.