I’m keeping a very close eye on earnings this season, and in the coming days I plan to preview several reports that could make headlines. We talked about some of the big financials last week, and today I want to talk about eBay Inc (NASDAQ:EBAY)
Ebay stock has traded very well over the last couple of months, rallying above its 50-day moving average (the blue line) in December and climbing higher ever since. It has outperformed the broader market so far in 2017, gaining more than 14% compared to the S&P 500’s 4.5%, and marked its best close ever just this past Monday.
The momentum is impressive, but it also puts added pressure on the company to beat expectations when its quarterly report is released after the close on Wednesday.
The whisper number on the Street is for earnings of 50 cents per share. The consensus estimate is a bit lower at 48 cents per share, although both numbers are below last year’s 54 cents per share. Revenue is also expected to decline, down to $2.21 billion from $2.39 billion a year ago.
Ebay gapped up and hit a record high after reporting earnings last quarter. Better-than-expected results this time around would go a long way toward keeping the current momentum going and pushing the stock even further into historic territory as it moves past its split with PayPal Holdings Inc (NASDAQ:PYPL).
On the other hand, if the company can’t beat expectations or at least offer bullish guidance, the shares would likely pull back as investors buy the rumor and sell the news.
From a technical perspective, EBAY stock has no resistance limiting its upside, so we’ll want to keep an eye on support at the 50-day moving average in the event that it weakens post-earnings. That level has acted as strong support on every pullback since December.
As long as the stock can hold above $33.62, its outlook will remain bullish.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt is currently in the midst of an exciting launch centered around his trademark three-prong investing approach that targets the mega-trends old Wall Street is missing out on. His next-gen investing strategy is delivering enormous profits in stocks and ETFs. Click here for more information on his latest venture.