eBay Inc. (EBAY) is set to report third-quarter 2013 results on Oct 16. Last quarter, it posted in-line results. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
eBay’s strength at PayPal, fast-growing presence in the mobile space and reinvigorated Marketplaces business led to higher sales growth rates in the second quarter of 2013. The continuous introduction of solutions to enhance the mobile shopping experience and rapid consumer adoption also contributed to higher sales.
The sale of low-value items and increased expenditure on the product launches contained gross margin expansion in the last quarter.
For the third quarter, eBay expects to generate GAAP EPS of 49 cents to 51 cents and non GAAP EPS of 61 cents to 63 cents.
Earnings Whispers?
Our proven model does not conclusively show that eBay will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 54 cents. Hence, the difference is 0.00%.
Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Other Stocks to Consider
You could consider other stocks with a positive earnings ESP and Zacks Rank #1, 2 or 3 such as:
Jarden Corp. (JAH), with Earnings ESP of +2.00% and a Zacks Rank #1 (Strong Buy)
Micron Technology Inc. (MU), with Earnings ESP of +4.35% and a Zacks Rank #1(Strong Buy)
Advanced Micro Devices, Inc (AMD), with Earnings ESP of +50.0% and a Zacks Rank #1 (Strong Buy)
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