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eBay Inc. (NASDAQ:EBAY) saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$70.93 and falling to the lows of US$59.52. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether eBay's current trading price of US$64.58 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at eBay’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is eBay Worth?
Great news for investors – eBay is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $98.02, but it is currently trading at US$64.58 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, eBay’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
View our latest analysis for eBay
Can we expect growth from eBay?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 5.3% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for eBay, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since EBAY is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on EBAY for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EBAY. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
