What happened

Shares of eBay (NASDAQ: EBAY) took a hit on Wednesday, falling as much as 5.1%. As of market close, however, the stock was down 4.5%.

The pullback in the online marketplace specialist’s stock price comes despite eBay’s better-than-expected earnings per share in the fourth quarter of 2019. The decline is likely primarily due to the company’s softer-than-expected outlook for its first-quarter 2020 revenue.

eBay offices in San Jose, California

Image source: eBay.

So what

eBay’s fourth-quarter revenue fell 2% year over year to $2.8 billion. This was in line with analysts’ average forecast for the metric. Non-GAAP (adjusted) earnings per share of $0.81, however, was ahead of a consensus estimate for $0.76.

eBay said active buyers across its platform rose 2% year over year to 183 million. But the tech company‘s total gross merchandise volume fell 5% — or 4% on a constant-currency basis — over this same timeframe.

Now what

Looking ahead, management said it expects first-quarter revenue between $2.55 billion and $2.60 billion. This range is below analysts’ average forecast for revenue of $2.64 billion during the period. Management forecast non-GAAP EPS between $0.70 and $0.73. This compares to an average analyst estimate of $0.70.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends eBay and recommends the following options: short January 2021 $37 calls on eBay and long January 2021 $18 calls on eBay. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.