Intrinsic value of eBay - EBAY

Previous Close

$37.61

  Intrinsic Value

$51.17

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  Rating & Target

buy

+36%

Previous close

$37.61

 
Intrinsic value

$51.17

 
Up/down potential

+36%

 
Rating

buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EBAY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 40.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.50
  8.70
  8.33
  8.00
  7.70
  7.43
  7.18
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
Revenue, $m
  8,979
  9,760
  10,573
  11,419
  12,298
  13,211
  14,160
  15,147
  16,172
  17,238
  18,347
  19,501
  20,703
  21,954
  23,259
  24,618
  26,037
  27,517
  29,063
  30,677
  32,365
  34,128
  35,973
  37,903
  39,922
  42,036
  44,250
  46,568
  48,996
  51,541
  54,208
Variable operating expenses, $m
 
  6,490
  6,994
  7,517
  8,061
  8,626
  9,213
  9,824
  10,459
  11,118
  11,805
  12,069
  12,812
  13,587
  14,394
  15,236
  16,113
  17,030
  17,986
  18,985
  20,030
  21,121
  22,263
  23,457
  24,707
  26,015
  27,385
  28,819
  30,322
  31,897
  33,548
Fixed operating expenses, $m
 
  678
  694
  712
  730
  748
  767
  786
  805
  825
  846
  867
  889
  911
  934
  957
  981
  1,006
  1,031
  1,057
  1,083
  1,110
  1,138
  1,166
  1,196
  1,225
  1,256
  1,287
  1,320
  1,353
  1,386
Total operating expenses, $m
  6,654
  7,168
  7,688
  8,229
  8,791
  9,374
  9,980
  10,610
  11,264
  11,943
  12,651
  12,936
  13,701
  14,498
  15,328
  16,193
  17,094
  18,036
  19,017
  20,042
  21,113
  22,231
  23,401
  24,623
  25,903
  27,240
  28,641
  30,106
  31,642
  33,250
  34,934
Operating income, $m
  2,325
  2,592
  2,885
  3,190
  3,507
  3,837
  4,180
  4,537
  4,908
  5,294
  5,696
  6,565
  7,001
  7,456
  7,931
  8,425
  8,942
  9,482
  10,046
  10,635
  11,252
  11,897
  12,572
  13,279
  14,020
  14,796
  15,609
  16,461
  17,354
  18,291
  19,274
EBITDA, $m
  3,007
  3,240
  3,549
  3,871
  4,206
  4,554
  4,917
  5,293
  5,685
  6,093
  6,518
  6,960
  7,420
  7,900
  8,401
  8,923
  9,469
  10,038
  10,633
  11,256
  11,906
  12,587
  13,300
  14,046
  14,827
  15,646
  16,503
  17,403
  18,345
  19,333
  20,370
Interest expense (income), $m
  220
  263
  299
  336
  375
  416
  458
  502
  548
  595
  644
  696
  749
  805
  862
  923
  985
  1,051
  1,119
  1,191
  1,265
  1,343
  1,425
  1,510
  1,599
  1,693
  1,790
  1,893
  2,000
  2,112
  2,230
Earnings before tax, $m
  3,651
  2,329
  2,586
  2,854
  3,132
  3,421
  3,722
  4,035
  4,360
  4,699
  5,052
  5,870
  6,252
  6,652
  7,068
  7,503
  7,957
  8,431
  8,926
  9,444
  9,986
  10,554
  11,147
  11,769
  12,421
  13,103
  13,818
  14,568
  15,354
  16,179
  17,044
Tax expense, $m
  -3,634
  629
  698
  770
  846
  924
  1,005
  1,089
  1,177
  1,269
  1,364
  1,585
  1,688
  1,796
  1,908
  2,026
  2,148
  2,276
  2,410
  2,550
  2,696
  2,849
  3,010
  3,178
  3,354
  3,538
  3,731
  3,933
  4,146
  4,368
  4,602
Net income, $m
  7,266
  1,700
  1,888
  2,083
  2,286
  2,497
  2,717
  2,945
  3,183
  3,430
  3,688
  4,285
  4,564
  4,856
  5,160
  5,477
  5,808
  6,154
  6,516
  6,894
  7,290
  7,704
  8,138
  8,592
  9,067
  9,565
  10,087
  10,635
  11,209
  11,811
  12,442

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  7,130
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  23,847
  18,175
  19,689
  21,264
  22,901
  24,602
  26,369
  28,206
  30,116
  32,101
  34,166
  36,315
  38,553
  40,883
  43,312
  45,844
  48,486
  51,242
  54,121
  57,127
  60,269
  63,554
  66,989
  70,582
  74,343
  78,279
  82,401
  86,718
  91,241
  95,980
  100,946
Adjusted assets (=assets-cash), $m
  16,717
  18,175
  19,689
  21,264
  22,901
  24,602
  26,369
  28,206
  30,116
  32,101
  34,166
  36,315
  38,553
  40,883
  43,312
  45,844
  48,486
  51,242
  54,121
  57,127
  60,269
  63,554
  66,989
  70,582
  74,343
  78,279
  82,401
  86,718
  91,241
  95,980
  100,946
Revenue / Adjusted assets
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
  0.537
Average production assets, $m
  1,631
  1,776
  1,924
  2,078
  2,238
  2,404
  2,577
  2,757
  2,943
  3,137
  3,339
  3,549
  3,768
  3,996
  4,233
  4,481
  4,739
  5,008
  5,289
  5,583
  5,890
  6,211
  6,547
  6,898
  7,266
  7,651
  8,053
  8,475
  8,917
  9,380
  9,866
Working capital, $m
  5,028
  -712
  -772
  -834
  -898
  -964
  -1,034
  -1,106
  -1,181
  -1,258
  -1,339
  -1,424
  -1,511
  -1,603
  -1,698
  -1,797
  -1,901
  -2,009
  -2,122
  -2,239
  -2,363
  -2,491
  -2,626
  -2,767
  -2,914
  -3,069
  -3,230
  -3,399
  -3,577
  -3,762
  -3,957
Total debt, $m
  8,960
  8,538
  9,612
  10,728
  11,889
  13,095
  14,348
  15,650
  17,004
  18,412
  19,876
  21,400
  22,986
  24,638
  26,360
  28,156
  30,028
  31,983
  34,024
  36,155
  38,383
  40,712
  43,147
  45,695
  48,361
  51,152
  54,075
  57,135
  60,342
  63,702
  67,223
Total liabilities, $m
  13,308
  12,886
  13,960
  15,076
  16,237
  17,443
  18,696
  19,998
  21,352
  22,760
  24,224
  25,748
  27,334
  28,986
  30,708
  32,504
  34,376
  36,331
  38,372
  40,503
  42,731
  45,060
  47,495
  50,043
  52,709
  55,500
  58,423
  61,483
  64,690
  68,050
  71,571
Total equity, $m
  10,539
  5,289
  5,730
  6,188
  6,664
  7,159
  7,673
  8,208
  8,764
  9,341
  9,942
  10,568
  11,219
  11,897
  12,604
  13,341
  14,109
  14,912
  15,749
  16,624
  17,538
  18,494
  19,494
  20,539
  21,634
  22,779
  23,979
  25,235
  26,551
  27,930
  29,375
Total liabilities and equity, $m
  23,847
  18,175
  19,690
  21,264
  22,901
  24,602
  26,369
  28,206
  30,116
  32,101
  34,166
  36,316
  38,553
  40,883
  43,312
  45,845
  48,485
  51,243
  54,121
  57,127
  60,269
  63,554
  66,989
  70,582
  74,343
  78,279
  82,402
  86,718
  91,241
  95,980
  100,946
Debt-to-equity ratio
  0.850
  1.610
  1.680
  1.730
  1.780
  1.830
  1.870
  1.910
  1.940
  1.970
  2.000
  2.020
  2.050
  2.070
  2.090
  2.110
  2.130
  2.140
  2.160
  2.170
  2.190
  2.200
  2.210
  2.220
  2.240
  2.250
  2.260
  2.260
  2.270
  2.280
  2.290
Adjusted equity ratio
  0.204
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291
  0.291

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7,266
  1,700
  1,888
  2,083
  2,286
  2,497
  2,717
  2,945
  3,183
  3,430
  3,688
  4,285
  4,564
  4,856
  5,160
  5,477
  5,808
  6,154
  6,516
  6,894
  7,290
  7,704
  8,138
  8,592
  9,067
  9,565
  10,087
  10,635
  11,209
  11,811
  12,442
Depreciation, amort., depletion, $m
  682
  647
  664
  681
  699
  717
  736
  756
  777
  799
  821
  394
  419
  444
  470
  498
  527
  556
  588
  620
  654
  690
  727
  766
  807
  850
  895
  942
  991
  1,042
  1,096
Funds from operations, $m
  2,846
  2,348
  2,552
  2,764
  2,985
  3,215
  3,453
  3,702
  3,960
  4,229
  4,509
  4,679
  4,983
  5,300
  5,630
  5,975
  6,335
  6,711
  7,104
  7,515
  7,945
  8,394
  8,865
  9,358
  9,874
  10,415
  10,982
  11,576
  12,200
  12,853
  13,538
Change in working capital, $m
  20
  -57
  -59
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -84
  -88
  -91
  -95
  -99
  -104
  -108
  -113
  -118
  -123
  -129
  -135
  -141
  -147
  -154
  -162
  -169
  -177
  -186
  -195
Cash from operations, $m
  2,826
  2,405
  2,611
  2,826
  3,049
  3,281
  3,523
  3,774
  4,035
  4,307
  4,590
  4,763
  5,071
  5,391
  5,725
  6,074
  6,438
  6,819
  7,217
  7,633
  8,068
  8,523
  9,000
  9,499
  10,022
  10,570
  11,144
  11,746
  12,377
  13,039
  13,733
Maintenance CAPEX, $m
  0
  -181
  -197
  -214
  -231
  -249
  -267
  -286
  -306
  -327
  -349
  -371
  -394
  -419
  -444
  -470
  -498
  -527
  -556
  -588
  -620
  -654
  -690
  -727
  -766
  -807
  -850
  -895
  -942
  -991
  -1,042
New CAPEX, $m
  -626
  -145
  -148
  -154
  -160
  -166
  -173
  -180
  -187
  -194
  -202
  -210
  -219
  -228
  -237
  -247
  -258
  -269
  -281
  -294
  -307
  -321
  -336
  -351
  -368
  -385
  -403
  -422
  -442
  -463
  -485
Cash from investing activities, $m
  -2,008
  -326
  -345
  -368
  -391
  -415
  -440
  -466
  -493
  -521
  -551
  -581
  -613
  -647
  -681
  -717
  -756
  -796
  -837
  -882
  -927
  -975
  -1,026
  -1,078
  -1,134
  -1,192
  -1,253
  -1,317
  -1,384
  -1,454
  -1,527
Free cash flow, $m
  818
  2,078
  2,266
  2,458
  2,658
  2,866
  3,083
  3,308
  3,542
  3,786
  4,040
  4,182
  4,458
  4,745
  5,044
  5,356
  5,682
  6,023
  6,379
  6,751
  7,140
  7,548
  7,974
  8,420
  8,888
  9,378
  9,891
  10,429
  10,993
  11,585
  12,205
Issuance/(repayment) of debt, $m
  2,196
  1,029
  1,073
  1,116
  1,160
  1,206
  1,253
  1,302
  1,354
  1,408
  1,464
  1,524
  1,586
  1,652
  1,722
  1,795
  1,873
  1,955
  2,041
  2,132
  2,228
  2,329
  2,435
  2,548
  2,666
  2,791
  2,922
  3,061
  3,206
  3,360
  3,521
Issuance/(repurchase) of shares, $m
  -2,841
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -744
  1,029
  1,073
  1,116
  1,160
  1,206
  1,253
  1,302
  1,354
  1,408
  1,464
  1,524
  1,586
  1,652
  1,722
  1,795
  1,873
  1,955
  2,041
  2,132
  2,228
  2,329
  2,435
  2,548
  2,666
  2,791
  2,922
  3,061
  3,206
  3,360
  3,521
Total cash flow (excl. dividends), $m
  -16
  3,108
  3,339
  3,575
  3,819
  4,072
  4,336
  4,610
  4,896
  5,194
  5,504
  5,706
  6,044
  6,397
  6,766
  7,152
  7,555
  7,978
  8,420
  8,883
  9,368
  9,876
  10,409
  10,968
  11,554
  12,169
  12,813
  13,490
  14,200
  14,945
  15,727
Retained Cash Flow (-), $m
  -3,963
  -429
  -441
  -458
  -476
  -495
  -514
  -535
  -556
  -578
  -601
  -625
  -651
  -678
  -707
  -737
  -769
  -802
  -838
  -875
  -914
  -956
  -1,000
  -1,046
  -1,094
  -1,146
  -1,199
  -1,256
  -1,316
  -1,379
  -1,445
Prev. year cash balance distribution, $m
 
  5,679
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  8,358
  2,899
  3,116
  3,342
  3,577
  3,822
  4,076
  4,340
  4,616
  4,903
  5,081
  5,393
  5,719
  6,059
  6,415
  6,787
  7,175
  7,582
  8,008
  8,454
  8,921
  9,410
  9,922
  10,460
  11,023
  11,614
  12,233
  12,884
  13,566
  14,281
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  8,013
  2,654
  2,712
  2,752
  2,773
  2,774
  2,754
  2,713
  2,652
  2,570
  2,413
  2,301
  2,174
  2,034
  1,883
  1,725
  1,561
  1,396
  1,233
  1,074
  923
  781
  650
  533
  429
  339
  263
  199
  148
  108
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

eBay Inc. (eBay) is a commerce company, which operates through its Marketplace, StubHub and Classifieds platforms. The Company connects buyers and sellers around the world. Its platforms enable sellers around the world to organize and offer their inventory for sale, and buyers to find and purchase it. Its platforms are accessible through an online experience (desktop and laptop computers), from mobile devices (smartphones and tablets) and by application programming interface (API) (platform access for third-party software developers). The Company's Marketplace platforms include its online marketplace located at www.ebay.com, localized counterparts and the eBay mobile applications. The Company's StubHub platforms include its online ticket platform located at www.stubhub.com, the StubHub mobile applications and Ticketbis. The Company's Classifieds platforms include a collection of brands, such as Mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others.

FINANCIAL RATIOS  of  eBay (EBAY)

Valuation Ratios
P/E Ratio 5.6
Price to Sales 4.6
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 14.5
Price to Free Cash Flow 18.6
Growth Rates
Sales Growth Rate 4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.3%
Cap. Spend. - 3 Yr. Gr. Rate -1.6%
Financial Strength
Quick Ratio 5
Current Ratio 0.1
LT Debt to Equity 71.2%
Total Debt to Equity 85%
Interest Coverage 18
Management Effectiveness
Return On Assets 37%
Ret/ On Assets - 3 Yr. Avg. 14.3%
Return On Total Capital 44.3%
Ret/ On T. Cap. - 3 Yr. Avg. 17.6%
Return On Equity 84.9%
Return On Equity - 3 Yr. Avg. 32.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 77.6%
Gross Margin - 3 Yr. Avg. 79.4%
EBITDA Margin 50.7%
EBITDA Margin - 3 Yr. Avg. 42.1%
Operating Margin 25.9%
Oper. Margin - 3 Yr. Avg. 26.5%
Pre-Tax Margin 40.7%
Pre-Tax Margin - 3 Yr. Avg. 32.4%
Net Profit Margin 80.9%
Net Profit Margin - 3 Yr. Avg. 33.8%
Effective Tax Rate -99.5%
Eff/ Tax Rate - 3 Yr. Avg. 18%
Payout Ratio 0%

EBAY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EBAY stock intrinsic value calculation we used $8979 million for the last fiscal year's total revenue generated by eBay. The default revenue input number comes from 2016 income statement of eBay. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EBAY stock valuation model: a) initial revenue growth rate of 8.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for EBAY is calculated based on our internal credit rating of eBay, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of eBay.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EBAY stock the variable cost ratio is equal to 66.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $661 million in the base year in the intrinsic value calculation for EBAY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for eBay.

Corporate tax rate of 27% is the nominal tax rate for eBay. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EBAY stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EBAY are equal to 18.2%.

Life of production assets of 9 years is the average useful life of capital assets used in eBay operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EBAY is equal to -7.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $10539 million for eBay - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1070.19 million for eBay is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of eBay at the current share price and the inputted number of shares is $40.2 billion.

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COMPANY NEWS

▶ Why I wear dead mens shoes   [Oct-23-17 09:43AM  MarketWatch]
▶ eBay's Slightly Improved Growth Is Coming at a Price   [Oct-22-17 07:00PM  TheStreet.com]
▶ Company News For Oct 20, 2017   [10:28AM  Zacks]
▶ Stocks Veer Lower; Verizon Surges, Apple Dives On Watch Glitch   [09:39AM  Investor's Business Daily]
▶ [$$] EBay Shares Fall on Lowered Profit Outlook   [05:17PM  The Wall Street Journal]
▶ EBay Meets Earnings Views, But Shares Tumble On Weak Outlook   [05:15PM  Investor's Business Daily]
▶ EBay meets 3Q profit forecasts   [04:29PM  Associated Press]
▶ eBay Sinks 5%: Guidance DisappointsAgain   [04:21PM  Barrons.com]
▶ 5 of the Craziest Items You Can Buy Off eBay   [10:52AM  TheStreet.com]
▶ [$$] EBay Earnings: What to Watch   [05:30AM  The Wall Street Journal]
▶ EBay Making a Bid for a Solid Q3   [10:53AM  Barrons.com]
▶ David Rolfe Comments on PayPal Holdings   [05:45PM  GuruFocus.com]
▶ EBay Scores Price-Target Hike As Optimism Grows On Earnings   [04:52PM  Investor's Business Daily]
▶ eBay Earnings Preview: What to Watch   [Oct-15-17 09:05PM  Motley Fool]
▶ [$$] Morgan Stanley Sees Payoffs From PayPal   [Oct-14-17 12:36AM  Barrons.com]
▶ Amazons International Losses: What Could They Be in 3Q17?   [Oct-13-17 03:06PM  Market Realist]
▶ [$$] Week in Review, October 14   [01:30PM  Financial Times]
▶ [$$] Why PayPal Is Stronger Than EBay   [Oct-12-17 02:47PM  Barrons.com]
▶ Stock-picking in this market is like good fishing   [Oct-11-17 06:59PM  CNBC Videos]
▶ PayPal Climbs On Upgrade, 'Never Going To Look Cheap Again'   [05:10PM  Investor's Business Daily]
▶ Why the PayPal Party Could Keep Rocking   [02:53PM  Barrons.com]
▶ This Just In: PayPal Stock Upgraded   [01:55PM  Motley Fool]
Financial statements of EBAY
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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