Is eBay Inc (EBAY) overvalued?
On Equity Rank's model estimate, EBAY trades close to its fair value (6% below it). eBay Inc (EBAY) last closed at $121.96; the multi-method model fair value is $129.00.
| Price | Model fair value | Price vs model |
|---|---|---|
| $121.96 | $129.00 | 6% below |
What the answer rests on
- 3 of 9 valuation methods put EBAY's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, EBAY's free cash flow would need to grow about 15.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -2.7% a year.
- EBAY trades at 27.3 times its last year's earnings, against a median of 39.9 for 10 profitable E-Commerce companies.
- Over the past year the price sat below the model fair value on 68% of trading days. The gap ranged from 19% below to 18% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind EBAY's fair value · What prices assume · Other companies