eBay Inc.

Limited growth opportunities bedevil the world’s foremost online auctioneer. But a...

Limited growth opportunities bedevil the world’s foremost online auctioneer. But a difficult-to-copy business model will protect profitability while the firm repurchases stock. A bid on this bidder offers a 39% upside and a 14% IRR.

Rundown

• Company name: eBay Inc.

• Ticker: EBAY 0.00%↑

• 52-week range: $36-81

• Market cap: $20bn

• Price: $38

• Target: $50–55

• Upside: +39%

• Recommendation: Buy

I) Story

Business model

eBay runs an online marketplace connecting buyers and sellers. The marketplace is free for buyers, but the company charges sellers a fee to list an item and a commission, usually 10%, on the sale price. The company gets almost half its revenue from America, while its next biggest markets are Britain and Germany.