eBay (EBAY) Shares Skyrocket, What You Need To Know

What Happened?

Shares of online marketplace eBay (NASDAQ:EBAY) jumped 19.8% in the afternoon session after the company reported second-quarter results that significantly beat Wall Street's expectations and provided a strong outlook for the upcoming quarter. 

The e-commerce company's revenue rose 6% to $2.73 billion, beating analysts' expectations. Adjusted profit also climbed to $1.37 per share, which was ahead of Wall Street's projections. The company attributed the strong performance to resilient marketplace activity and disciplined execution. Adding to the positive news, eBay provided an upbeat forecast for the third quarter, with expected revenue also exceeding consensus estimates. The company also noted its active buyer base grew to 134 million. The strong results and optimistic outlook sent the stock to a new all-time high and led several investment firms to raise their price targets.

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What Is The Market Telling Us

eBay’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for eBay and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 20.8% on the news that the company reported third-quarter earnings and provided revenue guidance for the next quarter, which missed analysts' expectations. In addition, its EBITDA fell short of Wall Street's estimates. Overall, this quarter could have been better.

eBay is up 48.3% since the beginning of the year, and at $92.33 per share, has set a new 52-week high. Investors who bought $1,000 worth of eBay’s shares 5 years ago would now be looking at an investment worth $1,670.

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