eBay on track

eBay reported Q2 earnings last night.

What is my 5 minute take?

eBay is doing great at the moment. Revenue growth is accelerating, the buy back program is making a material difference to EPS and cash flow is extremely strong.

GMV growth is still struggling in their two biggest markets; Germany and the USA. If they can re-accelerate growth in these markets then investors really will start to get excited.

There are a couple of worries; Skype growth is not where it should be and the total number of listings is dropping in some countries. But eBay management are working hard on these issues.

I love the fact that Meg understands that the eBay experience should be FUN and is introducing new initiatives to make the buying process even more fun.

I can see eBay making $1.7 per share in 2008. If eBay end this year on a forward PE multiple of 25 that gives them a price target of $42.

One day the share price is going to start moving. When it does I will be ready. I have been for the last 18 months but then I am a patient person!