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An index fund is an investment fund – either a mutual fund or an exchange-traded fund (ETF) – that is based on a preset basket of stocks, or index. Investors like index funds because they offer immediate diversification. An index fund usually owns at least dozens of securities and may own potentially hundreds of them, meaning that it’s highly diversified. With one purchase, investors can own a wide swath of companies. Because they’re diversified, investing in an index fund is lower risk than owning a few individual stocks.
Should you buy eBay stock?
eBay doesn’t own or sell the products on its platform. Instead, it creates and manages the platform that brings together buyers and sellers. To generate revenue, eBay collects a varying fee from every transaction on the platform. However, the company is currently grappling with waning online demand, stiff competition, and supply chain disruptions. Furthermore, the company expects its margins to be pressured as it scales its investments.
Is eBay stock worth buying?
The shares of popular online marketplace eBay (EBAY) are down 18.2% in price year-to-date. The momentum EBAY gained during the pandemic, fueled by an online shopping trend, has been waning as people return to in-person shopping. The company expects adjusted EPS in the range of $1.01 to $1.05 and revenue of $2.43 billion to $2.48 billion; both estimates are below Wall Street’s expectations. In terms of forward P/E, EBAY is currently trading at 16.51x, which is 17.8% higher than the 14.02x industry average. Also, its 3.27 forward EV/Sales ratio is 158.9% higher than the 1.26 industry average. The stock is currently trading below its 50-day and 200-day moving averages, indicating a downtrend.
The 23 analysts offering 12-month price forecasts for eBay Inc have a median target of 65.00, with a high estimate of 80.00 and a low estimate of 53.00. The median estimate represents a +24.78% increase from the last price of 52.09.
Thus, given the bearish near-term sentiments, we think it could be wise to wait for a better entry point in the stock. eBay may not be an explosive growth stock, but it offers investors good value at its current price.