Shares of online auction site eBay (NASDAQ: EBAY) jumped today after its quarter four 2010 financial results were released. The company reported a 5 percent increase in revenues year-over-year and a 10 percent increase when excluding Skype’s financial results. At $2.5 billion, EBAY’s actual revenues beat the average estimate of analysts. All of this worked to help EBAY go from a closing price of $29.10 on January 19th to $30.78 today.
Analysts at Deutsche Bank were not exactly won over by these results, attributing much of the gains to Paypal fees and the benefit of a reduced tax rate rather than improved business strategy or results. According to an article on StreetInsider.com (“eBay (EBAY) Exceeds Views Bolstered by PayPal, Lower Taxes; Analysts Chime In,” January 20, 2011, StreetInsider.com), Deutsche Bank believes that there is a
…weakness still existing in Marketplace despite solid online holiday sales.
As a result of this, Deutsche Bank maintained its sell recommendation for EBAY, but did raise its target to $22.
Interestingly, one of EBAY’s largest competitors, Amazon.com (NASDAQ: AMZN), didn’t benefit from this uptick and actually fell from $186.87 to $181.96.
Covestor models with holdings in this sector include: Management Access, Abandon Stock, Long-Short Generalist, Long Term Value, andBottom-Up Analysis Agg.
*Prices and charts courtesy of Yahoo Finance.
