eBay (EBAY) shares slumped lower after the online marketplace posted stronger-than-expected fourth quarter earnings but cautioned on slowing growth in the months ahead.
eBay said holiday quarter profits rose 23.5% from last year to $1.05 per share, on revenues of $2.61 billion, but forecast flat earnings and lower revenues for the current three-month period as it struggles with a declining customer base as pandemic re-openings erode part of its online appeal.
Gross merchandise volume (GMV), which accounts for all trading across the eBay platform, fell 10.4% from last year to $20.7 billion, with global active buyers down 9% to 147 million.
"2022 will be the tale of two halves. During the first half of the year with less significant mobility and macro tailwinds from 2021 as margins pressured as we scale investments sequentially," CFO Steve Priest told investors on a conference call late Wednesday. "During the second half, we should observe the cleanest year-over-year comps, we have encountered since entering the pandemic revealing the underlying growth and earnings power of our business."
eBay shares were marked 6.8% lower in early trading to change hands at $50.82 each, a move that would extend the stock's six-month decline to around 30.5%.
Much like Pinterest (PINS), eBay is looking to grow profits from a focus on higher-end buyers as its broader active base declines, with a focus on expensive items such as sneakers and handbags.
"Moves to focus on high value buyers are driving better results in focus categories, but we continue to monitor total active buyer trends as a barometer of overall marketplace health," said KeyBanc Capital Markets analyst Edward Yruma, who carries an 'overweight' rating with a $90 price target on the stock.
"Near-term margins will be pressured as eBay scales investments sequentially, and 1H GMV growth will be pressured due to lapping stimulus and mobility restriction tailwinds," he added.
