Shares of eBay fell nearly 8 percent in trading Thursday after the company reported sluggish growth in its marketplace business and lowered its revenue forecast for the rest of the year.
This would be the worst single day of trading for eBay’s stock in nearly two years if the drop holds until the close, as the stock dropped nearly 11 percent on Oct. 20, 2016.
The online marketplace reported second-quarter earnings of 53 cents per share, while revenue came in at $10 billion. While the earnings were 2 cents per share above what analysts surveyed by Thomson Reuters anticipated, eBay’s revenue came in $50 million short of expectations. In addition, eBay adjusted its full-year revenue forecast, lowering its estimate to a range of $10.75 billion to $10.85 billion from its previous estimate of $10.9 billion to $11.1 billion.
“Marketplace initiatives … are ramping slower than expected and likely shifts potential acceleration to 2019,” Raymond James analysts wrote in a note to investors, also noting that growth in eBay’s subsidiary StubHub “is likely to remain challenging near-term.”
StubHub’s quarterly performance missed Credit Suisse’s expectation as well. The firm said in a note that StubHub’s lackluster result was “due to a poor events environment.”
“We expect eBay shares to revisit recent lows, as the headwinds in StubHub was an unexpected development,” Credit Suisse said.
Shares of eBay were nearly flat for the year before its second-quarter earnings report, up 0.6 percent at $37.95 per share as of Wednesday’s close.