MorningWord 101713 Tough Day in $EBAY

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InwhathasbecomeadisappointingtrendforeBayinvestors,thecompanyonceagainloweredguidanceforthefollowingquarteronthisquartersresults?

EBAYbeatearningsbyapennyandbarelymissedrevenues,butthestockisdown5%inthepre-marketbecauseofitsreducedguidanceforQ4。

PayPalcontinuestobethebrightspotinwhatmanagementcharacterizedasalacklustermacroenvironmentoverall?

Revenueincreased19%andusersgrew17%year-over-year,withnettotalpaymentvolumegrowing25%?

Moreconcerningwasmanagementsviewonthe4thquarter?

Onthecall,CFOBobSwansaidthathedoesntexpectU。

S。

E-commerceratestoimproveinthepivotal4thquarter?

ThecompanyisalreadyworriedaboutthepaceofE-commercesalessofarheadingintotheholidayseason。

Inthepre-marketthestockisbackdownnearthe$50level(currentlytrading$50。

15)?

Thestockhasbouncedfromthe$49-50areaon4occasionsinthepast10months:

EBAYdaily,200daymainblack,CourtesyofBloomberg

AswehighlightedintheMorningWordonMonday,marketparticipantswanthighgrowthatanypriceinthecurrentenvironment?

SoevenifEBAYoffersdecentgrowthatareasonableprice,investorsarenotwillingtogiveitthebenefitofthedoubtliketheyarewithotherinternetcompanies。

Havingsaidthat,wereonthelookoutforhowthestockreactsaroundthecrucial$50level?

Ifitshowssignsofholding,wemighttakeashotonthelongside,sincevaluationisstillreasonableforacompanygrowingsalesandearningsata15%clipperyear。

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MorningWord10/14/13:$EBAYGreatopportunitytobuygrowthatareasonableprice?

EBAYwillreporttheirQ3earningsWednesdayaftertheclose?

Theoptionsmarketisimplyingabouta5%movefollowingtheresults,whichisessentiallyinlinewiththe4qtravgmoveandshyofthe8qtravgmoveofabout6。

4%?

INayearthathaswitnessedaresurgenceinaspeculativeappetiteforNetstocks,EBAYs6。

6%ytdgainsseemfairlydisappointingwhenyouconsiderthestocktradesat17xnextyearsearningsthatanalystsexpecttogrow18%,and14。

5x2015earningsexpectedtogrowat17%。

ToputEBAYsunder-performanceinsomecontext,itsnotjustagainstallthosenew-fangledsocialmediastocks,butalsovstheWeb1。

ostockslikeAMZNGOOGup23%ytd,PCLNYHOOup62%and71%respectively。

IspentmostofthisyearscratchingmyheadastoEBAYslackofparticipation?

FBsnearly120%gainssincethe2013lows,gainingnearlyasmuchinmarketcapasallofEBAY,probablyhasalottoduewithit?

Themoneyhasjustbeengoingtootherplaces,andwhileEBAYappearstobeverycheaponaPEtoGrowthmetric(tradingat17xnextyearsexpectedearningsgrowthrateof18%),itappearsthattechinvestorswouldratherpayupforgrowthratesthatarelikelyunsustainable。

Whilethismaylookatadenticing,SanfordBernsteinanalystCarlosKirjner(whoratesthesharesabuywitha$6612monthpricetarget)suggestsinaquarterlypreviewdatedOct10ththat:

3Q13willbeimportantforeBay。

Eithertheresultsandguidancewillconfirmthecompanysabilitytodeliveronisguidancewithameaningfulaccelerationin2H13,whichshouldcarryinto2014,orwemayseethecompanylowerannualguidance,ormaintainitbutjustsqueezebyonEPSbycutting?

investment,whichwillcallintoquestionthelongtermsustainabilityofitsgrowth。

Investorshaveaninsatiableappetiteforgrowth,andFBislikelytocontinuetoworkaslongastheyareabletoputupeye-poppingmobileadgrowth(whichwillmostdefinitelydeceleratemeaningfullyinthenextcouplequarterswatchoutbelowwhenthathappens),butEBAYsslowandsteadyMarketplaceandPayPaljustdonthavetheSexappealatthemoment。

IfEBAYsQ3comesoffwithoutahitch,andtheforwardguidanceremainsintactthenitmayendupbeingoneofthegreatopportunitiestobuygrowthatareasonablepriceinthisentiremarket?