Is eBay Inc (EBAY) Stock Trading Below Fair Value?
Investors Observer gives eBay Inc (EBAY) a solid review score of 66 based on its analysis. The proprietary rating system takes into account the underlying health of a company by analyzing its stock price, earnings and rate of growth. EBAY currently holds a better value than 66% of the shares based on these metrics. Long-term buy and hold investors should find the most relevant valuation ranking system when making investment decisions.
EBAY’s 12-month price-to-earnings (PE) ratio of 17.4 puts it around the historic average of around 15. EBAY is an average value at its current trading price, as investors pay roughly that. that it is worth in relation to the company’s profits. EBAY’s last 12 month earnings per share (EPS) of 4.15 justifies what it is currently trading in the market. However, trailing PE ratios do not take into account a company’s projected growth rate, resulting in some companies having high PE ratios due to high growth potentially attractive to investors, even though current earnings are weak. EBAY’s 12-month PEG to Growth (PEG) ratio of 1.69 is considered mediocre as the market overstates EBAY relative to the company’s expected earnings growth. EBAY’s PEG is derived from its forward price / earnings ratio divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and the stock price. Due to their integration of more fundamentals of the overall health of a company and their focus on the future rather than the past, PEG ratios are one of the most widely used valuation measures by analysts today. ‘hui.
EBAY’s valuation measures are weak at its current price due to an overvalued PEG ratio despite strong growth. EBAY’s PE and PEG are lower than the market average, resulting in a lower than average valuation score. Click here for the full eBay Inc (EBAY) inventory report.