Goldman Sachs Revises Estimates For eBay

eBay Inc (NASDAQ: EBAY) reported its Q3 2016 results, with the revenue ahead of the consensus and guidance.

Goldman Sachs’ Heath P. Terry maintained a Buy rating on the company, while raising the price target from $34 to $35.

Related Link: eBay Shares Tumble On Poor Guidance

eBay reported its Q3 revenue at $2.22 billion, ahead of the consensus and representing 8 percent ex-FX growth, as compared to the guidance of 6-7 percent growth.

The non-GAAP EPS came in at $0.45, marginally ahead of the consensus and guidance, while the take rate improved 30 bps quarter on quarter, driven primarily by StubHub.

In addition, the company bought back shares worth $500 million during the quarter, with $2.3 billion remaining of its current authorization at the end of Q3.

“With continued traction in eBay’s tech and marketing initiatives driving healthier GMV growth, ongoing capital returns, and the stock trading at 8X 2017E EV/EBITDA, we continue to believe EBAY represents compelling risk/reward,” Terry stated.

The company guided to Q4 2016 revenue of $2.36-$2.41 billion and EPS of $0.52-$0.54, with the high end of the guidance in line with the consensus.

eBay also raised its FY 2016 revenue guidance from $8.85-$8.95 billion to $8.95-$9.0 billion.

Estimates Revised

The 2016-2018 revenue and adjusted EBITDA estimates have been raised by 1 percent and 2 percent, on average, respectively, to reflect growth driven by the company’s marketplace initiatives and StubHub, as well as the continued marketing investment.

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