Can eBay (EBAY) Preserve the Earnings Shock Streak Alive? – January 8, 2021

Searching for a inventory that has been persistently beating earnings estimates and may be properly positioned to maintain the streak alive in its subsequent quarterly report? EBay (EBAY Free Report) , which belongs to the Zacks Web – Commerce business, might be a terrific candidate to think about.

When trying on the final two stories, this e-commerce firm has recorded a powerful streak of surpassing earnings estimates. The corporate has topped estimates by 7.35%, on common, within the final two quarters.

For the final reported quarter, eBay got here out with earnings of $0.85 per share versus the Zacks Consensus Estimate of $0.76 per share, representing a shock of 11.84%. For the earlier quarter, the corporate was anticipated to submit earnings of $1.05 per share and it truly produced earnings of $1.08 per share, delivering a shock of two.86%.

Worth and EPS Shock

With this earnings historical past in thoughts, current estimates have been shifting larger for eBay. In actual fact, the Zacks Earnings ESP (Anticipated Shock Prediction) for the corporate is constructive, which is a superb signal of an earnings beat, particularly whenever you mix this metric with its good Zacks Rank.

Our analysis exhibits that shares with the mix of a constructive Earnings ESP and a Zacks Rank #3 (Maintain) or higher produce a constructive shock practically 70% of the time. In different phrases, when you’ve got 10 shares with this mix, the variety of shares that beat the consensus estimate might be as excessive as seven.

The Zacks Earnings ESP compares the Most Correct Estimate to the Zacks Consensus Estimate for the quarter; the Most Correct Estimate is a model of the Zacks Consensus whose definition is expounded to vary. The thought right here is that analysts revising their estimates proper earlier than an earnings launch have the newest data, which might doubtlessly be extra correct than what they and others contributing to the consensus had predicted earlier.

EBay at the moment has an Earnings ESP of +1.52%, which means that analysts have just lately change into bullish on the corporate’s earnings prospects. This constructive Earnings ESP when mixed with the inventory’s Zacks Rank #3 (Maintain) signifies that one other beat is presumably across the nook.

With the Earnings ESP metric, it is essential to notice {that a} unfavourable worth reduces its predictive energy; nevertheless, a unfavourable Earnings ESP doesn’t point out an earnings miss.

Many firms find yourself beating the consensus EPS estimate, although this isn’t the one purpose why their shares achieve. Moreover, some shares could stay secure even when they find yourself lacking the consensus estimate.

Due to this, it is actually essential to examine an organization’s Earnings ESP forward of its quarterly launch to extend the chances of success. Be sure to make the most of our Earnings ESP Filter to uncover the most effective shares to purchase or promote earlier than they’ve reported.

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