eBay Revisited While Waiting to Buy
eBay (EBAY) and its e-commerce business has remained a successful, American enterprise where bidders can buy and sellers can ponder the offers. When the company began in 1995 many wondered if the business model it offered would work. Today there aren't many doubters left.
Headquartered in San Jose, Calif., eBay has become a true legend in its own time. As its online site describes, "With more than 100 million active users globally (as of fourth-quarter 2011), eBay is the world's largest online marketplace, where practically anyone can buy and sell practically anything.
"..., eBay connects a diverse and passionate community of individual buyers and sellers, as well as small businesses. Their collective impact on ecommerce is staggering: In 2011, the total value of goods sold on eBay was $68.6 billion -- more than $2,100 every second."In 2012 those figures continued to go higher.
eBay just completed four consecutive earnings quarters where it surprised on the upside. No wonder shares are trading (as of Monday) slightly below its 52-week high set on Fridayat $56.66. That brings the trailing PE ratio to over 28 and the forward (one-year) PE ratio to around 17.4.
A careful look at the five-year chart of EBAY helps us see not only its recent history but also the levels which investors had outstanding buying opportunities. Since the beginning of 2012 shares have almost doubled. We see that the share price and the trailing-twelve-month revenue per share rose in tandem.