eBay Inc (EBAY), Amazon.com, Inc. (AMZN): Why This E-Commerce Site Is on the Rise

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Overstock.com, Inc. (NASDAQ:OSTK) is an online retailer that offers discount, brand-name, and non-brand name products. Recently, the company had a successful second quarter with revenue up 22% to $293.2 million. It’s a smaller company than Amazon.com, Inc. (NASDAQ:AMZN) and eBay, but the market is expecting growth from the company as evident from the company trading at 27.57 times forward earnings.

Of these three companies, eBay is currently the cheapest with a forward P/E and PEG of 16.31 and 1.24, respectively. Overstock.com, Inc. (NASDAQ:OSTK) has its P/E of 27.57 and a peg of 1.40 and Amazon.com, Inc. (NASDAQ:AMZN) has a large P/E and PEG of 94.56 and 6.25. Amazon’s ratios are closer to companies that offer instant video streaming like Netflix, Inc. (NASDAQ:NFLX).

eBay has competitively high gross and operating margins of 69% and 21%, respectively. Compared to Amazon’s margins of 25% and 1% and Overstock.com, Inc. (NASDAQ:OSTK)’s 22% and 2%, it’s clear that eBay’s business retains more of its sales than its competitors do.

Conclusion

eBay is primed to take advantage of the growing mobile market. The company is making it easier for consumers to purchase and receive the products they order online. With the expected increase in enabled commerce and the company’s impressive margins, I see eBay stock going up as the company’s image shifts from online auctioning to an online business facilitator.

Ben Popkin has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and eBay. The Motley Fool owns shares of Amazon.com and eBay. Ben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Why This E-Commerce Site Is on the Rise originally appeared on Fool.com is written by Ben Popkin.

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