Wall Street investors evidenced their disappointment in eBay’s projected sales for 2016 – its first PayPal-free year. Shares dropped about 4 percent yesterday (June 8) to $60.54.
eBay’s latest filing indicates that it expects its marketplace division’s revenue will either remain flat next year or perhaps pick up as much as 5 percent. That is slightly below analyst estimates, which pegged revenue growth at around 5.2 percent.
“We believe it will be difficult for eBay to pivot its brand and search experience, which has been attempted in the past, and would expect continued headwinds to the business beyond 2016,” said Piper Jaffray’s Gene Munster, according to The Wall Street Journal. He further noted that eBay faces particular threat from more regularized marketplaces like Amazon.
The company estimated a rise in free cash flow to roughly $2.3 billion to $2.5 billion in 2016, up from $2.1 billion to $2.3 billion in 2015.
PayPal gave projections filed yesterday that anticipate 15 percent sales growth — not including foreign currency — over the “medium term.” The medium term was not further defined. For this year, the company expects revenue growth of between 15 percent and 18 percent.
Revenue in the eBay marketplace declined in Q1 2015, when PayPal exceeded eBay’s revenue for the first time.
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