EBay and Shopify Drop as Outlooks Signal Reopening, Supply Woes
(Bloomberg) -- EBay Inc. tumbled 6.8% on Thursday, the most in three months, after the e-commerce company gave a sales outlook for the holiday quarter that missed Wall Street estimates.
Canadian e-commerce firm Shopify Inc. also dropped after saying supply-chain delays could push some business into 2022, though the stock rebounded to gain 7%. Jefferies analyst Samad Samana said Shopify’s third-quarter report was a “rare across-the-board miss, but better than feared.”
EBay’s fourth-quarter sales outlook missed estimates due to expectations for a decline in gross merchandise volume after the pandemic-fueled growth in 2020, according to Bloomberg Intelligence analyst Poonam Goyal. In addition to facing tougher comparisons, Shopify also warned that supply-chain disruptions and inflation means that the current period would represent a smaller percentage of overall annual sales in 2021 than in the past.
The cautious outlooks show that e-commerce companies are grappling with a variety of challenges as economies reopen from Covid-19 lockdowns, which largely benefited their businesses. Shopify shares more than doubled in 2020, while EBay climbed 39%.
Earlier on Thursday, a report showed that U.S. economic growth slowed more than expected in the third quarter as supply-chain issues and a surge in Covid-19 cases throttled spending and investment.
Jefferies analyst John Colantuoni said EBay’s sales outlook was particularly disappointing given that he anticipated the company would benefit from disruptions at other retailers this holiday season. “EBay’s relevance to consumers in a normal environment is a key concern,” he added.
Regarding Shopify, Samana at Jefferies said one bright spot of the report was the take rate expansion in the merchant solutions business. Still, Baird analyst Colin Sebastian predicted that Shopify shares will remain “choppy” in the near term following the company’s first revenue miss in over five years.
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