It appears as though at least one Wall Street analyst is beginning to see past the smoke and mirrors of eBay CEO's Devin Wenig. (Link to SeekingAlpha.com article
.) This analyst is now seeing eBay in much the same way many small sellers have been seeing eBay over the past few years.
* The company's latest Q1 results reveal a platform that's struggling to be relevant to users and poor forward-looking guidance that indicates management's uncertainty about the future.
* It costs nothing to use eBay as a buyer, yet eBay's active buyer pool absolutely pales in comparison to Amazon. There is no better indication that eBay's platform no longer jives with the modern consumer.
*... for a company that's posting low single-digit growth, contracting profit margins, and has little hope of being relevant in five years, eBay is more of a value trap.
* eBay still relies heavily on its core Marketplace business to drive results, but looking at the low user growth and just 1% growth in sold items, it doesn't seem the product is capable of appealing to today's buyers.
* eBay's widespread reputation for charging high seller fees also has alienated a large part of the supply side of eBay's marketplace.
* eBay is attempting to leverage AI technologies to improve the marketplace search functions on the site, but it's unclear whether this alone can bring back a swath of users.
* Acquisitions and buybacks can only help the optics for so long - the company does heavy $10.7 billion of cash on its balance sheet, but that's balanced by an almost equal ($9.2 billion) load of debt. Investments in product development are a good attempt at driving organic growth, but it's doubtful that eBay can return to double-digit user and GMV growth.
*eBay's Q1 results reveal a company that's struggling to remain relevant and is having only modest success at growing its user base and GMV.
* It's difficult to envision this company still being healthy in five years. eBay already has tried many different measures to revitalize itself, all to mixed results.
Small sellers, the canaries in the eBay coal mine, have been pointing out many of these observations since John Donahoe ran the company. Wall Street generally continued to drink the kool aid passed out in quarterly reports by the company's CEO.
It appears that now the company is going to be challenged by Wall Street to actually grow and perform instead of relying on promises of improvement based on ill conceived marketplace changes as those many so called 'improvements' have consistently failed to produce any significant improvement in GMV growth.