EBAY Gears Up to Post Q1 Earnings: What's in Store for the Stock?

eBay EBAY is scheduled to report its first-quarter 2025 results on April 30.

See the Zacks Earnings Calendar to stay ahead of market-making news.

For the first quarter, eBay expects total revenues between $2.52 billion and $2.56 billion. EBAY’s diluted non-GAAP earnings per share are expected to be between $1.32 and $1.36.

The Zacks Consensus Estimate for revenues is currently pegged at $2.55 billion, indicating a 0.35% decrease from the year-ago quarter’s reported figure.

The consensus mark for earnings has remained unchanged at $1.34 per share in the past 30 days, implying a 7.20% increase from the year-ago quarter’s $1.25.

EBAY surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with an average positive surprise of 3.40%.

Let us see how things are shaping up for the upcoming announcement.

eBay Inc. Price and EPS Surprise

eBay Inc. price-eps-surprise | eBay Inc. Quote

Factors to Consider

eBay is expected to have benefited from continued momentum in Focus Categories during the first quarter of 2025, especially Motors Parts & Accessories, Trading Cards, and Refurbished goods. Strategic enhancements, including the expansion of managed shipping in the United Kingdom and greater use of AI-driven tools like Magical Listing, are likely to have supported gross market value (GMV) trends and modest revenue growth during the quarter under review.

The rollout of buyer protection fees for U.K. C2C transactions and improvements in the managed shipping program are expected to have begun contributing to monetization in the first quarter. However, these initiatives were only partially implemented during the quarter, which might have weighed slightly on take rate performance early in the year, offsetting some of the positive impacts from advertising and financial services.

Advertising revenues are likely to have continued growing steadily in the first quarter, helped by the broader adoption of Promoted Listings and improved campaign management tools. Nevertheless, macroeconomic weakness in Europe, FX headwinds, and calendar effects, such as the leap year comparison, are expected to have pressured GMV growth and revenue performance relative to the strong holiday-driven fourth quarter.

On the cost side, eBay guided for operating margins between 29% and 29.4% in the first quarter. However, margin expansion was expected to be constrained by a 70-basis-point increase in depreciation expenses from extending equipment useful life, and 20 basis points of mergers and acquisitions-related costs, partly offset by contributions from advertising and financial services.

eBay’s top line in the first quarter is likely to have been impacted by slower consumer demand trends in key international markets. Management highlighted persistent macroeconomic softness in the United Kingdom and Germany, with lower consumer confidence and discretionary spending weighing on transaction volumes. While U.S. trends were more resilient, international weakness is likely to have offset part of the gains from Focus Categories and advertising during the quarter.

What Our Model Says for EBAY

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not exactly the case here.

Snap currently has an Earnings ESP of -0.38% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:

Caesars Entertainment CZR currently has an Earnings ESP of +23.98% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CZR shares have lost 14.9% in the year-to-date (YTD) period. It is set to report its first-quarter 2025 results on April 29.

Airbnb ABNB has an Earnings ESP of +6.00% and a Zacks Rank #3 at present.

ABNB shares have lost 6.8% YTD. Airbnb is scheduled to report its first-quarter 2025 results on May 1.

Roblox RBLX has an Earnings ESP of +5.21% and a Zacks Rank #2 at present.

RBLX shares have gained 15.1% YTD. Roblox is scheduled to report its first-quarter 2025 results on May 1.

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This article originally published on Zacks Investment Research (zacks.com).

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