Investopedia: Will eBay's Numbers Match Its Business?

EBay (Nasdaq:EBAY) is a strange business in many respects. Along with Amazon (Nasdaq:AMZN), eBay has been out there almost since the beginning of the internet as a public phenomenon, and it has managed to avoid the malaise and irrelevance that has withered AOL (NYSE:AOL), Yahoo (Nasdaq:YHOO), and a host of businesses that have either taken low-ball bids or gone out of business altogether.


And yet, there are some oddities to eBay's numbers. Though eBay basically dominates online auctions and has built an impressive business out of PayPal, the company's returns on invested capital are not all that spectacular and the company's free cash flow margin has been in prolonged decline. The question, then, may not be so much about eBay's future growth prospects as it is about how much of that growth will ultimately benefit shareholders.

Satisfactory Third Quarter Results
All in all, eBay's third quarter report was fine. Reported revenue rose 32%, while organic revenue growth was more on the order of 18%. The company's marketplaces business saw revenue growth of 17%, while PayPal revenue grew 32% on a 14% increase in registered accounts and 31% increase in net payment volume.


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