eBay Stock Blasted with Bear Notes After Dismal Forecast

The stock has shed 30% in the last six months

Digital Content Manager
Feb 24, 2022 at 10:22 AM
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eBay Inc (NASDAQ:EBAYis sinking, last seen down 3.6% to trade at $52.52, after the e-commerce giant issued a disappointing current-quarter revenue forecast, amid cooling online demand and global supply chain challenges. This update has investors brushing off a fourth-quarter earnings beat of $1.05 per share, while revenue was in line with Wall Street's expectations.

The brokerage bunch is blasting eBay stock with bear notes today. So far, at least nine firms have cut their price targets, with J.P. Morgan Securities lowering its price objective to $60 from $70. Analysts were already skeptical of the stock coming into today, with 12 of the 18 in coverage rating it a tepid "hold." 

The options pits echo that pessimism. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EBAY's 10-day put/call volume ratio of 2.33 sits higher than 96% of readings from the last 12 months. This suggests puts have been getting picked up at a much quicker-than-usual pace. 

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.41 sits in the 90th percentile of annual readings, meaning short-term options traders have rarely been more put-biased. 

Options traders are targeting EBAY after its earning event, too. So far today, 13,000 calls and 39,000 puts have crossed the tape, which is nine times what is typically seen at this point. Most popular is the 2/25 55-strike put, followed by the 49-strike put in the same weekly series.

The security has been pulling further and further away from its Oct. 22, all-time high of $81.19. The stock's 30-day moving average helped pressure the shares lower over the past few months, and today EBAY breached a floor at the $54 level. In the past six months, EBAY has shed 30.4%.

 

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