Stock Analysis on Net

eBay Inc. (NASDAQ:EBAY)

$22.49

This company has been moved to the archive! The financial data has not been updated since October 24, 2019.

Analysis of Profitability Ratios

Microsoft Excel

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Profitability Ratios (Summary)

eBay Inc., profitability ratios

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Return on Sales
Gross profit margin
Operating profit margin
Net profit margin
Return on Investment
Return on equity (ROE)
Return on assets (ROA)

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).


Gross Profit Margin
The gross profit margin exhibited an overall upward trend from 2014 to 2018. Starting at 67.98% in 2014, it increased significantly to a peak of 79.39% in 2015, followed by a slight decline and stabilization in the range of approximately 76.77% to 77.83% in the years 2017 and 2018. This pattern suggests sustained efficiency in managing the cost of goods sold relative to revenue.
Operating Profit Margin
The operating profit margin showed a marked improvement from 2014 to 2016, rising from 19.63% to a peak of 25.89% in 2016. However, this was followed by a decline during 2017 and 2018, dropping to 23.68% and further to 20.68%, indicating a reduction in operating profitability after the peak despite remaining above the 2014 level.
Net Profit Margin
The net profit margin demonstrated considerable volatility throughout the period. It started near flat at 0.26% in 2014, increased sharply to 20.08% in 2015, and then surged dramatically to 80.92% in 2016. Nonetheless, it plunged to a negative margin of -10.62% in 2017, indicating a loss, before recovering to 23.54% in 2018. This fluctuation points to significant variability in the bottom line profitability, possibly influenced by extraordinary items or fluctuating expenses.
Return on Equity (ROE)
ROE followed a similar pattern of volatility as the net profit margin. From a very low 0.23% in 2014, it climbed to 26.23% in 2015 and peaked sharply at 68.94% in 2016. This was followed by a negative return of -12.6% in 2017, and a subsequent recovery to 40.28% in 2018. These swings reflect considerable changes in shareholder returns, aligning with the fluctuations observed in net profitability.
Return on Assets (ROA)
ROA also exhibited fluctuations but with less magnitude compared to ROE. Starting at 0.1% in 2014, it increased to 9.7% in 2015 and peaked at 30.47% in 2016 before declining to a negative figure of -3.91% in 2017. It then partially recovered to 11.09% in 2018. This trend indicates the company's asset utilization efficiency has varied significantly, mirroring overall profitability trends.

Return on Sales


Return on Investment


Gross Profit Margin

eBay Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Gross profit
Net revenues
Profitability Ratio
Gross profit margin1
Benchmarks
Gross Profit Margin, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × ÷ =

2 Click competitor name to see calculations.


Gross Profit
The gross profit exhibited a significant decline from 12,170 million USD in 2014 to 6,821 million USD in 2015. Following this drop, the gross profit gradually increased over the subsequent years, reaching 8,364 million USD by the end of 2018. This pattern indicates an initial substantial decrease, succeeded by a steady recovery phase.
Net Revenues
Net revenues followed a similar pattern to gross profit, starting at 17,902 million USD in 2014 and dropping sharply to 8,592 million USD in 2015. From 2015 onward, net revenues showed a steady upward trend each year, increasing to 10,746 million USD by the end of 2018. This suggests the company was able to progressively grow its revenue base after the initial decline.
Gross Profit Margin
The gross profit margin experienced an increase from 67.98% in 2014 to 79.39% in 2015, marking a notable improvement in profitability despite the sharp decline in absolute gross profit. Although the margin slightly decreased in 2016 and 2017 to 77.65% and 76.77%, it rebounded to 77.83% in 2018. Overall, the gross profit margin remained relatively strong and stable in the later years, reflecting effective cost management relative to revenues.

Operating Profit Margin

eBay Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Income from operations
Net revenues
Profitability Ratio
Operating profit margin1
Benchmarks
Operating Profit Margin, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Operating profit margin = 100 × Income from operations ÷ Net revenues
= 100 × ÷ =

2 Click competitor name to see calculations.


Income from operations
The income from operations shows a significant decline from 3514 million US dollars in 2014 to 2197 million in 2015. Subsequently, it experienced a modest increase in 2016 to 2325 million, followed by a slight decrease in 2017 to 2265 million, and a further decline to 2222 million in 2018. Overall, the income from operations demonstrates a downward trend after 2014, with some fluctuation but no substantial recovery to the initial amount.
Net revenues
Net revenues display a contrasting pattern. There is a steep drop from 17902 million in 2014 to 8592 million in 2015. From 2015 onward, net revenues show gradual growth each year, increasing to 8979 million in 2016, 9567 million in 2017, and reaching 10746 million in 2018. Despite the initial decline, the revenue trend post-2015 is positive, indicating recovery and expansion over the subsequent years.
Operating profit margin
The operating profit margin increased from 19.63% in 2014 to a peak of 25.89% in 2016, suggesting improved operational efficiency or cost control during this period. However, after 2016, the margin declined to 23.68% in 2017 and further to 20.68% in 2018, indicating a reduction in profitability relative to revenues. Despite this decline, the margins in 2017 and 2018 remained higher than the 2014 level.
Overall analysis
The data reflects an initial sharp decline in both income from operations and net revenues between 2014 and 2015, possibly due to structural changes, divestitures, or other significant events. Following this, net revenues steadily increased each year through 2018, indicating business growth or stabilization. Conversely, income from operations did not follow the same growth trajectory and remained relatively flat with slight decreases after 2015. The operating profit margin peaked in 2016 but decreased thereafter, suggesting challenges in maintaining operational efficiency amid growing revenues. The divergence between increasing net revenues and relatively stagnant income from operations could imply rising costs or investments impacting profitability.

Net Profit Margin

eBay Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net income (loss)
Net revenues
Profitability Ratio
Net profit margin1
Benchmarks
Net Profit Margin, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
Net profit margin = 100 × Net income (loss) ÷ Net revenues
= 100 × ÷ =

2 Click competitor name to see calculations.


Net Income (Loss)
The net income experienced significant volatility over the period. Starting at 46 million US dollars in 2014, it surged sharply to 1,725 million in 2015 and peaked at 7,266 million in 2016. However, in 2017, the company reported a loss of 1,016 million, before recovering to a net income of 2,530 million in 2018. This pattern indicates sharp fluctuations in profitability, with a particularly notable downturn in 2017.
Net Revenues
Net revenues exhibited a contrasting trend compared to net income. Revenues started at 17,902 million in 2014 but dropped drastically to 8,592 million in 2015. From 2015 onwards, revenues displayed a steady increase, rising to 8,979 million in 2016, 9,567 million in 2017, and reaching 10,746 million by 2018. This suggests a recovery and gradual growth in sales or service income following a sharp decline in 2015.
Net Profit Margin
The net profit margin showed substantial swings over the given timeframe, reflecting changes in profitability relative to revenues. The margin was minimal at 0.26% in 2014, soaring to a high of 80.92% in 2016. In 2017, the margin turned negative to -10.62%, consistent with the reported loss, before rebounding to 23.54% in 2018. These fluctuations indicate varying operational efficiency and cost control effectiveness, with 2016 being unusually profitable relative to sales, and 2017 representing a period of loss.

Return on Equity (ROE)

eBay Inc., ROE calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net income (loss)
Stockholders’ equity
Profitability Ratio
ROE1
Benchmarks
ROE, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × ÷ =

2 Click competitor name to see calculations.


The financial data reveals notable fluctuations in the company's profitability, equity, and return on equity (ROE) over the five-year period analyzed.

Net Income (Loss)
The net income exhibits significant volatility. In 2014, the company posted a modest profit of $46 million. The following year, net income surged dramatically to $1,725 million and further to $7,266 million in 2016, marking the peak of the period. However, 2017 saw a reversal with a net loss of $1,016 million. In 2018, profitability resumed, with net income returning to a positive $2,530 million. This pattern suggests periods of strong earnings interspersed with a substantial loss year.
Stockholders’ Equity
The stockholders’ equity shows a downward trend over the timeframe. Beginning at $19,906 million in 2014, equity declined sharply to $6,576 million in 2015. It rebounded somewhat to $10,539 million in 2016, then decreased again to $8,063 million in 2017, and continued falling to $6,281 million by the end of 2018. This general decline points to possible distributions, value adjustments, or losses impacting the equity base.
Return on Equity (ROE)
The ROE mirrors the net income results with pronounced variability. Starting at a very low 0.23% in 2014, ROE increased substantially to 26.23% in 2015 and peaked at an exceptionally high 68.94% in 2016, reflecting very strong profitability relative to equity. The value turned negative to -12.6% in 2017, consistent with the net loss that year. In 2018, ROE rebounded to a strong 40.28%, indicating improved efficiency in generating returns on equity.

Overall, the data suggests the company experienced a cycle of strong profitability and equity returns, interrupted by a year of losses and declining equity levels. While profitability recovered in the last year, the declining equity base may have influenced the volatility in ROE, emphasizing the importance of monitoring equity changes alongside earnings performance.


Return on Assets (ROA)

eBay Inc., ROA calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net income (loss)
Total assets
Profitability Ratio
ROA1
Benchmarks
ROA, Competitors2
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

1 2018 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × ÷ =

2 Click competitor name to see calculations.


Net Income (Loss) Trend
The net income exhibits significant fluctuation throughout the analyzed period. Initially, it was relatively low at 46 million in 2014, followed by a remarkable increase to 1,725 million in 2015 and further to a peak of 7,266 million in 2016. However, in 2017, the net income dropped sharply to a loss of 1,016 million. This decline was then partially recovered in 2018 with net income rising again to 2,530 million.
Total Assets Trend
Total assets decreased markedly from 45,132 million in 2014 to 17,785 million in 2015. After this significant reduction, assets showed a gradual recovery, increasing to 23,847 million in 2016 and 25,981 million in 2017 before declining again to 22,819 million in 2018. Overall, total assets remained below the initial 2014 levels for the subsequent years.
Return on Assets (ROA) Analysis
Return on assets followed a pattern similar to net income, starting very low at 0.1% in 2014 and increasing sharply to 9.7% in 2015. This positive trend peaked at an impressive 30.47% in 2016, reflecting high efficiency in generating profit from assets. However, ROA turned negative to -3.91% in 2017 before rebounding to 11.09% in 2018. This indicates volatility in asset profitability during the period, coinciding with fluctuations in net income and total assets.
Overall Insights
The data reveals that the company experienced a period of instability and volatility between 2014 and 2018. While net income and ROA peaked significantly in 2016, both indicators suffered a notable downturn in 2017 accompanied by a loss and negative return on assets. The reduction in total assets from 2014 to 2015 suggests possible asset divestitures or strategic shifts, followed by a partial recovery. The subsequent performance indicates challenges that affected profitability, though some recovery signs appeared in 2018.