eBay continues to grow even after the opening of the economy


 

eBay shares are trading 30% above early 2021 levels, but given the fact that stock indices are near historic highs, the potential for further growth in quotations remains.

eBay is very different from other tech companies. While others are constantly acquiring firms in order to increase revenues and do not really think about profitability, eBay has no regrets about parting with unprofitable divisions. In 2019, StubHub was sold, and in 2020 - Classifieds. The fact that management is well aware of its strengths and prefers to focus only on those areas that make money is an excellent signal for investors.

eBay is a niche company, but that doesn't mean it can't be big. According to the results of the first quarter, the volume of GMV (total volume of goods turnover) increased by 29% per year, to $ 27.46 billion. Seasonality is of great importance for such companies: usually, the last three months of the year are the most successful quarter.

However, eBay managed to perform even better than in the previous quarter, with GMVs growing consistently by 3%. And this despite the fact that retail stores began to reopen after the quarantine. The number of active buyers in the first quarter increased to a maximum of 187 million. The size of the gross margin increased by 4 points per year, to 28%, and the size of FCF - by 65% ​​per year, to $ 855 million.

The company continues to improve its service. Thanks to the new rules for placing lots related to images, users save about 75% of the time to create an ad. The innovations were introduced to support the strong demand for collectible cards that emerged in the past year.


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