StubHub: EBay's Ticket to Growth -- Ahead of the Tape
October 18 2016 - 4:13PM
Dow Jones News
By Steven Russolillo
EBay Inc.'s turnaround without PayPal Inc. is taking shape with
a new growth driver in the spotlight: StubHub.
More than a year after parting with its payments subsidiary,
eBay took its time showing that it can thrive as an independent
company. Its overall sales have risen for two consecutive quarters,
a trend that Wall Street expects will continue Wednesday when the
e-commerce giant reports third-quarter results. Part of that can be
attributed to ticket reseller StubHub's recent success.
Analysts polled by FactSet estimate adjusted earnings of 36
cents a share, matching eBay's year-ago results. Revenue is
expected to have increased 4.1% to $2.19 billion. StubHub is
anticipated to account for 11% of eBay's quarterly revenue, up from
8% during 2015.
EBay only started breaking out StubHub's results following last
year's fourth quarter. In the first half of the year, StubHub's
revenue increased 37% from a year earlier, far surpassing the
mid-single-digit growth for eBay overall. StubHub said earlier this
year that it acquired Ticketbis, a Spanish competitor, to expand
its overseas presence. It also reached a deal to resell New York
Yankees tickets.
StubHub's strong growth comes as eBay continues to refashion
itself as more of an online marketplace and less of a platform just
for buying and selling used goods. That has yielded mixed results,
with eBay facing heavy competition from Amazon.com Inc. and other
e-commerce platforms. EBay also is investing more in how its online
marketplace is organized, focusing on so-called structured data.
And it is working to improve its search functionality with the goal
of boosting its standing in Google search results.
In July, eBay reported a small uptick in active buyers and its
biggest gain in U.S. merchandise volumes since 2014 -- trends
analysts expect to continue. It raised full-year earnings and sales
outlooks, prompting its shares to surge 11% that day, one of its
biggest gains over the past five years.
A cash cow, eBay remains an ardent buyer of its own stock. Even
as the stock has surged 30% in a year, it fetches a modest 15 times
projected earnings over the next 12 months.
More gains could be in store.
(END) Dow Jones Newswires
October 18, 2016 15:58 ET (19:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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