EBAY stock price has made a lower price low but has made a higher low in terms of momentum. This is an underappreciated growth stock. Goldman Sachs thinks the 3-year growth rate 2008-2011 for ebay is +16%. While this is not hypergrowth, the growth is still significant for a large cap stock. A 1.5x PEG yields a P/E multiple near 24x. Given eBays excellent cash generation relative to earnings per share, ebays earnings are worth significantly more than the S&P 500 average --- assuming the growth rate holds up. I believe the stock is worth $35-40.
$30.45 (12/28/06)
