Today we are going to take a look at the well-established company eBay Inc. (NASDAQ: EBAY). The company’s shares have received a lot of attention due to a substantial price increase on the NASDAQGS over the past few months. With many analysts covering large-cap stocks, we can expect any price-sensitive announcements to have already factored into the stock price. However, could the stock still trade at a relatively cheap price? Let’s take a closer look at eBay’s valuation and outlook to determine if there is still an opportunity to trade.
Check out our latest analysis for eBay
Is eBay still cheap?
Good news for investors – eBay is still trading at a fairly cheap price. According to my assessment, the intrinsic value of the stock is $74.33, but it is currently trading at US$58.35 in the stock market, which means there is still a buying opportunity now. However, since eBay’s share is quite volatile (meaning its price movements are amplified relative to the rest of the market), this could mean that the price may drop, giving us another chance. to buy in the future. This is based on its high beta, which is a good indicator of stock price volatility.
Can we expect growth from eBay?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Although value investors argue that it is intrinsic value relative to price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. However, with negative earnings growth of -6.4% expected over the next two years, near-term growth certainly does not appear to be a driver for a buy decision for eBay. This certainty tilts the risk-reward scale toward higher risk.
What does this mean to you :
Are you a shareholder? Although EBAY is currently undervalued, the unfavorable outlook of negative growth carries a degree of risk. Consider whether you want to increase your portfolio’s exposure to EBAY, or whether diversifying into another security may be a better decision for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on EBAY for a while but are hesitant to take the plunge, I recommend digging deeper into the stock. Given its current undervaluation, now is the time to make a decision. But keep in mind the risks that come with a negative growth outlook going forward.
So, if you want to dig deeper into this stock, it is crucial to consider the risks it faces. For example – eBay has 2 warning signs we think you should know.
If you are no longer interested in eBay, you can use our free platform to see our list of more 50 other stocks with strong growth potential.
This Simply Wall St article is general in nature. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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