Long Story Short: Time To Watch eBay Inc. (EBAY)

In the period that ended December 31, 2018, short interest in eBay Inc. (NASDAQ:EBAY) stock is on the rise. The 22.22% advance could be an indication that investors and traders expect a deterioration in the stock price, often as a result of a deterioration in the business’ fundamentals. The average analyst recommendations at 2.5 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 27.27 million shares. That was 4,958,364 more shares than the total of 22.32 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for EBAY at the December 31st settlement jumped to 14,661,133, as compared to 13,654,227 at the December 14th report. That brought days to cover to 1.860277, a 13.83% increase from the 1.634322 days to cover recorded at the prior short interest data release.

eBay Inc. (EBAY) will probably climb 19.17 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $52-month high price target. This represents a whopping 71 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $33, which represents a return potential of 8.52 percent when compared to the closing price of the stock of $30.41 on Friday, January 11. The lowest price target for the stock is $30 — slightly more than -1.35 percent from EBAY’s current share price.

The stock is currently hovering around the first support level of $29.71. Below this, the next support is placed in the zone of $29.01. Till the time, the EBAY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 62.27 on daily chart, which may remain a cause for concern. If the price breaks below $29.01 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $30.82 mark may result into a pull-back move towards $31.24 level.

On 11th of January, eBay Inc. (NASDAQ:EBAY) shares ended lower after a volatile session. The shares dropped -0.16 points or -0.52 percent at $30.41 with a light trade volume of 13.062 million shares. After opening the session at $30.15, the shares went as high as $30.535 and as low as $29.42, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $29.4 billion and now has 967.89 million shares outstanding. eBay Inc. (EBAY) stock has gained 4.68 percent of market value in 21 trading days.

EBAY stock has a trailing 3-year beta of 1.27, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.25 a share in the trailing twelve months. The stock’s value has surged 8.34 percent year to date (YTD) against a decline of -19.34 percent in 12 month’s time. The company’s shares still trade -35.28 percent away from its 1-year high of $46.99 and 16.92 percent up from 52-week low of $26.01. The average consensus rating on the company is 2.5, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of eBay Inc. (EBAY) are trading at a P/E ratio of 12.77 times earnings reported for the past 12 months. The industry EBAY operates in has an average P/E of 25.67. Its P/E ratio went as low as 4.66X and as high as 19.23 over the 5-year span. Further, it is sporting a 2.81 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.62. 77.5 percent is the gross profit margin for eBay Inc. and operating margin sits at 21 percent. Along with this, the net profit margin is -7.9 percent.

Let’s take a look at some insider activity at eBay Inc. (NASDAQ:EBAY) and see the pattern. The earliest insider trade took place on 01/02/2019. Swan Robert Holmes gathered a total of 17.79 thousand shares of company at average share price of $28.21. The total for the purchase was set at $501.77 thousand. After this transaction, the Director account balance stood at 289.21 thousand shares. The stock grew 7.8 percent since that insider purchase. On 11/30/2018, Lee Jae Hyun, SVP, EMEA, sold 33.65 thousand shares at a price per share of $29.23. This removed 983.65 thousand shares from the insider’s fortune and the stock saw a 4.04 percent rally in value since the news became public. This transaction left 105.83 thousand shares in the SVP, EMEA account.

On 11/27/2018, SVP, APAC Park Joo Man performed a sale transaction worth $522.53 thousand. This sale at $28.58 each has eliminated 18.28 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 6.4 percent increase since the transaction was reported. The insider now is left with 99.17 thousand shares remaining in the account. Omidyar Pierre M, who performs the Director job, sold 36 thousand shares for $1.04 million. The disposal occurred on 11/26/2018 was priced at $28.82 per share. The share price soared 5.52 percent since the reporting date. Omidyar Pierre M now left with a stake of 45.4 million EBAY stock worth $1380.58 million after the insider selling.