eBay EBAY is scheduled to report its fourth-quarter 2024 results on Feb. 26.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

For the fourth quarter of 2024, EBAY expects revenues in the range of $2.53-$2.59 billion. On an FX-neutral basis, the year-over-year change in revenues is anticipated to be (1)%-1%. On a spot rate basis, the same is expected to be (1)%-1%.

The Zacks Consensus Estimate for revenues is pegged at $2.58 billion, implying an increase of 0.64% from the year-ago reported figure.

The company anticipates non-GAAP earnings per share between $1.17 and $1.22, indicating year-over-year growth of 9-14%.

The consensus mark for earnings is pegged at $1.20 per share, indicating a rise of 12.15% from the year-ago quarter’s reported figure.

EBAY’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 3.33%.

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

Factors to Consider

eBay’s UK C2C initiative, launched in the fourth quarter, aims to boost gross merchandise volume (GMV) by eliminating seller fees while introducing a buyer fee in the first quarter of 2025. This strategy increases listings and seller engagement, driving transaction volume. The top line of the fourth quarter is likely to have seen limited benefit as monetization through buyer fees has not started, and the bottom line is expected to be pressured due to managed shipping costs and waived seller fees. Despite short-term profitability pressure, the initiative is expected to unlock a larger total addressable market, increasing long-term revenues. If successful, eBay may expand this model beyond the United Kingdom. While fourth-quarter results are expected to reflect a negative impact on the bottom line, GMV growth and increased engagement might mean stronger revenue generation in 2025.

eBay’s advertising revenues grew 11% year over year in the third quarter, reaching $408 million, with first-party ads up 14%. This growth was driven by Promoted Listings, cost-per-click ads, and offsite ads, with more than $1 billion in live promoted listings. In the fourth quarter, advertising revenues are expected to have continued to contribute to the top line, helping offset pressures from the UK C2C initiative. 

The fourth quarter is likely to have faced headwinds due to a shorter holiday shopping season and distractions from the U.S. elections. With fewer shopping days compared to last year, consumer spending patterns might have shifted, limiting revenue growth. Additionally, election coverage and political events could have reduced consumer focus on discretionary spending, impacting transaction volumes. The top line is expected to have taken a hit in the quarter under review due to these seasonal and macroeconomic factors.

eBay uses AI-powered listing and bulk listing tools on their platform, which are designed to streamline the selling process, making it easier and faster for sellers to create listings. Features like Magical Listing and Bulk Listing tools use AI to auto-generate descriptions, titles, and item specifics, reducing time and effort for sellers. These tools are likely to have impacted the bottom line in the fourth quarter, by improving operational efficiency and driving higher seller engagement.

What Our Model Says

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.

EBAY currently has an Earnings ESP of -0.25% 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 on earnings in their upcoming releases:

Six Flags Entertainment Corporation FUN currently has an Earnings ESP of +9.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FUN shares have jumped 13.5% in the trailing 12 months. It is set to report its fourth-quarter 2024 results on Feb. 27.

Life Time Group Holdings LTH currently has an Earnings ESP of +14.29% and sports a Zacks Rank #1.

LTH shares have skyrocketed 164.1% in the trailing 12 months. Life Time Group Holdings is slated to report its fourth-quarter 2024 results on Feb. 27.

Maplebear Inc. CART has an Earnings ESP of +19.51% and a Zacks Rank #3 at present.

CART shares have jumped 66.8% in the trailing 12 months. Maplebear Inc is scheduled to report its fourth-quarter 2024 results on Feb. 25.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

eBay Inc. (EBAY) : Free Stock Analysis Report

Six Flags Entertainment Corporation (FUN) : Free Stock Analysis Report

Maplebear Inc. (CART) : Free Stock Analysis Report

Life Time Group Holdings, Inc. (LTH) : Free Stock Analysis Report

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

Zacks Investment Research