The shares of eBay Inc. (NASDAQ:EBAY) and Snap Inc. (NYSE:SNAP) were among the active stocks of the last trading sessions. eBay Inc. (NASDAQ:EBAY) declined to -0.07% closing at the price of $29.84 whereas the shares of Snap Inc. (NYSE:SNAP) declined -2.5% with the decrease of -0.18 points closing at the price of $7.02. eBay Inc. has currently decrease -22.01% in its stock over the period of 6-months while its rival Snap Inc. subtracted -36.41% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of eBay Inc. (NASDAQ:EBAY) is 11% while the ROI of Snap Inc. (NYSE:SNAP) is -102.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, EBAY’s EBITDA Margin is 11.04 whereas SNAP’s is -4.94.
Both the profitability ratios suggest that eBay Inc. (NASDAQ:EBAY) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
eBay Inc. (NASDAQ:EBAY) reported $0.56/share EPS for the previous quarter where analysts were predicting an EPS to be $0.54/share Thus beating the analyst Estimates with a Surprise Factor of 3.7 Percent. While, Snap Inc. (NYSE:SNAP) reported EPS of $-0.12/share in the last quarter. The analysts projected EPS of $-0.14/share depicting a Surprise of 14.3 Percent.
Taking a look at Earnings per Share, Snap Inc. tends to be beating the analyst estimates more than eBay Inc.. so SNAP is more profitable than EBAY.
Technical Analysis of eBay Inc. & Snap Inc.
Moving average convergence divergence (MACD) shows that eBay Inc. (NASDAQ:EBAY) is on a PRICE RELATIVITY trend While Snap Inc. (NYSE:SNAP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the eBay Inc. was in BULLISH territory and Snap Inc. was in BULLISH territory.
EBAY’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While SNAP’s candle is BEARISH with HIGH.
EPS Growth Rate: EBAY’s 11.57% versus SNAP’s 41.8%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of eBay Inc. (NASDAQ:EBAY) is predicted at 11.57% while Snap Inc. (NYSE:SNAP) stands at 41.8%. These numbers suggest that SNAP is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of EBAY stands at 1.7 while SNAP is at 6 whereas the debt ratio of the prior is 1.33 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.4 for EBAY and 3.2 for SNAP which means EBAY has Hold rating whereas SNAP has Sell rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for EBAY is $37.01 which is 19.37% of its current price while SNAP has price target of 8.13 which is 13.65% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
EBAY currently has price to earning P/E ratio of 13.26 whereas SNAP has 0 while the forward P/E ratio for the prior stands at 11.61 and for the later it depicts the value of 0.
The price to Book P/B for EBAY is 4.2, Price to Sale is at 2.78 and for SNAP these ratios stand at 3.86 and 8.92.