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Today we're going to take a look at the well-established eBay Inc. (NASDAQ:EBAY). The company's stock received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on eBay’s outlook and valuation to see if the opportunity still exists.
Is eBay Still Cheap?
Good news, investors! eBay is still a bargain right now. According to our valuation, the intrinsic value for the stock is $111.25, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. 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.
See our latest analysis for eBay
What does the future of eBay look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 3.8% 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 financial health 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 investment decision.