eBay (NASDAQ:EBAY) is set to release its earnings report on Wednesday, April 30, 2025. An examination of the stock’s historical performance in connection with earnings announcements over the previous five years shows that eBay recorded a negative one-day return in 57% of these cases. The median negative return was -7.1%, with the most significant one-day decline reaching -11.7%. Also check out: How To Trade CAT Stock Ahead Of Its Earnings?
For event-driven traders, comprehending these historical patterns can be beneficial. There are two primary strategies: first, to evaluate the historical probabilities of various post-earnings stock movements to establish a position before the earnings announcement. Second, to analyze the relationship between the immediate stock response and medium-term returns after the earnings are disclosed, and then position themselves accordingly.
Current consensus forecasts indicate earnings per share (EPS) of $1.34 on revenue of $2.55 billion for the upcoming quarter. This is compared to the same period last year, which reported earnings of $1.25 per share on revenue of $2.56 billion. Elevated inflation and weak consumer sentiment are expected to impact the company’s top-line growth negatively.
From a fundamental perspective, eBay currently possesses a market capitalization of $32 billion. Over the last twelve months, the company generated $10 billion in revenue, achieving operating profits of $2.3 billion and a net income of $2.0 billion.
Ultimately, the market’s response to eBay’s forthcoming earnings will be significantly influenced by how the actual financial results align with these consensus estimates and broader market anticipations.
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EBAY Stock Historical Odds Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There have been 19 earnings data points logged over the last five years, with 7 positive and 12 negative one-day (1D) returns recorded. In conclusion, positive 1D returns occurred approximately 37% of the time.
- However, this percentage drops to 27% when considering data from the last 3 years instead of 5.
- The median of the 7 positive returns is 1.6%, while the median of the 12 negative returns is -7.1%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns after earnings are summarized along with the statistics in the table below.
EBAY Stock Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky approach (although not effective if the correlation is weak) is to comprehend the correlation between short-term and medium-term returns post earnings, identify a pair with the highest correlation, and execute the suitable trade. For instance, if 1D and 5D display the strongest correlation, a trader can position themselves “long” for the subsequent 5 days if the 1D post-earnings return is positive. Here is some correlation data from the 5-year and 3-year (more recent) history. Note that the correlation 1D_5D pertains to the relationship between 1D post-earnings returns and following 5D returns.
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