eBay Stock: Shares Fall Despite Earnings Beat

eBay's stock suffered a significant setback on the NASDAQ, plummeting over 8% to $64.07, despite the online marketplace giant surpassing analyst profit expectations in its fourth quarter results. The company reported earnings per share of $1.25, exceeding the forecasted $1.20, though falling short of the previous year's $1.40. Revenue saw a modest 1% increase to $2.6 billion, slightly above the $2.57 billion anticipated by market experts. For the full fiscal year 2024, eBay achieved $10.28 billion in revenue, representing a 1.7% year-over-year growth, precisely matching market expectations. The annual earnings per share reached $4.88, surpassing analyst projections of $4.83, but this positive development was overshadowed by concerns about future performance.

Growth Outlook Disappoints Investors

The primary catalyst for the negative market reaction appears to be management's conservative guidance for the current quarter. eBay forecasts approximately 1% revenue growth for Q1, substantially below investor expectations who had anticipated stronger momentum, particularly following the recent integration of eBay offerings within META/Facebook's commerce section. Market observers speculate whether executives may have intentionally provided cautious projections to potentially deliver positive surprises in the coming quarter. However, investors showed little patience for such potential strategy, as reflected in the significant share price decline. The disappointing outlook has created hesitation among market participants regarding immediate investment in the company's stock.

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Source StockWorld