eBay (EBAY) has been around since 1995 and most everyone is familiar with the name. However, what some people may not know is just how undervalued this stock is right now.
Currently, eBay is sitting around the mid 50s in terms of price, but its numbers and future outlook is promising.
According to Yahoo! Finance, eBay has beat earnings estimates the past four earnings calls.
This is no easy feat, considering the current pandemic and the turmoil the economy has seen.
No one knows for certain when the economy will be out of these volatile and unpredictable times, but eBay is one stock that I believe will hold true and give investors great returns in the long run.
This is partly due to the fact that online sales have jumped tremendously worldwide since there have been massive economic and consumer shutdowns.
If people can’t go out and shop, they get online and have it shipped to their house without ever having to get off the couch. That is great news for eBay.
The strategy here isn’t to get rich quick by buying low and expecting it to skyrocket overnight.
eBay is a stock you are going to get in on now and hold for the long term because it is going to offer high returns down the road. It will not only weather this current storm but ultimately climb to new highs year after year.
By the numbers
Let’s take a look at some of the numbers and current projections.
As I mentioned before, eBay has been sitting around the low to mid 50s, and it has even hit an all-time high during these trying times.
Since eBay is a multinational e-commerce corporation, it has been able to continue growing while so many other companies are crumbling to new lows and even going under.
This will allow the company to continue moving forward since the demand for buying and selling products will more than likely never cease to exist.
It also allows for not only consumer-to-consumer selling but also business-to-consumer selling, much like Amazon, which appears to be a great business model.
Earnings per share (EPS) is currently sitting at $6 while free cash flow per share (FCF) is $8.54.
This means eBay is sitting on enough cash to continue growing and sustaining their numbers while this pandemic continues to play out. This is important because it will keep the company from having to take on any additional debt, which could cause harm to the company long term.
The company recently came out and stated that they are expecting revenue for 2020 to be around $10.75 billion which is higher than what they had previously predicted.
This number also beats what analysts were projecting for the current year.
Their future growth rate is currently sitting at 12% to 13% per year, which means that in 10 years this stock could be worth over $500.
That is a wonderful return and it will allow you to sleep well at night knowing you bought this stock before everyone realized how great it was.