eBay Inc (EBAY), Amazon.com, Inc. (AMZN): Macro Indicators, Earnings & More

eBay Inc (NASDAQ:EBAY)’s recent quarter was fairly strong, but the weak guidance is what caused the sell-off in the stock. The company trades at an expensive P/E multiple, and as such, it has to offer substantial growth otherwise investors will sell the stock on any signs of deterioration in growth/outlook.

The recent sell-off may have been warranted, but there’s no reason to panic. Upon closer examination, the business still exhibits robust growth, growth worth investing into.

Macroeconomic indicators

eBay Inc (NASDAQ:EBAY)’s total payment volumes surged year-over-year. The effects are numerous. For one, it implies that online retail is booming (look out for Amazon.com, Inc. (NASDAQ:AMZN)), online retailers, along with specialty retailers can be seen as better buying opportunities going forward.

Source:
eBay

eBay Inc (NASDAQ:EBAY)’s total payment volumes grew 25% in the merchant category. The increasing adoption of digital payment systems implies that online retailers, along with specialty retailers, should be able to report better results. The growth in digital currency greases the wheels of commerce, and it can be seen as an accurate forward indicator.

Furthermore, eBay Inc (NASDAQ:EBAY)’s international payment volume jumped 47% year-over-year, which has counter-balanced the declining growth from maturing markets (United States and Europe).

Source: Ycharts

U.S. real personal consumption expenditures have been on a consistent incline over the past five years. The growth in personal consumption, along with simplified methods to purchase goods and services (PayPal, Visa, MasterCard), should grease the wheels of retail companies.

How this applies to other companies

Online giant Amazon.com, Inc. (NASDAQ:AMZN) relies heavily upon online commerce. Amazon.com, Inc. (NASDAQ:AMZN) is rolling out its online retail platform to emerging and developing markets. PayPal reported 47% year-over-year growth in its international payment volumes. The emerging market is one of Amazon.com, Inc. (NASDAQ:AMZN)’s biggest bets, and it’s banking on the adoption of digital currency in order to meet its growth targets.

Analysts anticipate Amazon.com, Inc. (NASDAQ:AMZN)’s to grow earnings by 37.69% on a compounded basis for the next five years.

Wal-Mart Stores, Inc. (NYSE:WMT) is another beneficiary of this news. Retailers love it when merchant services like Visa Inc (NYSE:V), PayPal, and MasterCard Inc (NYSE:MA) post growth in payment volumes.

Improvement in payment volumes leads to more accurate record keeping of financial transactions. Wal-Mart Stores, Inc. (NYSE:WMT)’s international division may be able to report improved profit margins due to efficiencies in basic commerce. The international adoption of digital currency gives investors a reason to stay invested in retail.