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eBay Is Still An Internet Value Play

Axiom's Victor Anthony recommended approximately a year ago that investors should buy eBay Inc EBAY 1.91%'s stock over Paypal Holdings Inc PYPL 2.46% after the company separated itself into the two units.

The analyst revisited his thesis in a report on Tuesday and reaffirmed his belief that eBay's stock could offer superior return on improving conversion metrics due to the structured data implementation and continued execution at StubHub and capital returns.

Anthony expanded that eBay's structured data implementation continues to show signs of progress and working based on a 10 percent improvement in conversions on the subset of eBay traffic relative to others. The company should continue to see even further improving conversion rates as the company seeks to structure over 90 percent of their one billion listings.

StubHub

Meanwhile, while StubHub is facing tough comps from pricing display changes, updates to the mobile app and a new campaign in the third quarter, a "strong" line-up of sports and concerns in the bottom half of 2016 will help offset the tough comps.

Anthony said eBay's stock is still trading at "relatively low multiples" versus its peers. Specifically, the stock is trading at a PEG of 1.0x on his 2017 non-GAAP earnings per share estimate and at an above-peer free cash flow yield of 8 percent.

Bottom line, Anthony stated eBay remains an "attractive value play within the Internet space" and shares were reiterated with a Buy rating with a price target boosted to $38 from $37.

DateFirmActionFromTo
Aug 2016Hilliard LyonsInitiates Coverage onLong-term Buy
Jul 2016Deutsche BankMaintainsHold
Jul 2016Cantor FitzgeraldMaintainsHold

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