It has been about a month since the last earnings report for eBay Inc. EBAY. Shares have added about 3.7% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

eBay Beats Earnings and Revenue Estimates in Q1

eBay’s first-quarter 2017 earnings and revenues came ahead of expectations.

Earnings of 43 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Adjusted earnings per share exclude one-time items but include stock-based compensation expense.

Revenues

Revenues of $2.2 billion beat the Zacks Consensus Estimate by a slight margin and came ahead of the company’s guidance at the mid-point.

Revenues  were up 3.7% on a year-over-year basis (up 7% on an Fx-neutral basis). In the first quarter, the Marketplace platform contributed $20 billion of gross merchandise volume (GMV) and $1.8 billion of revenues. Marketplace GMV grew 2% year over year on a reported basis and 5% on an FX-Neutral basis. On the other hand, StubHub also showed signs of accelerated growth with contribution of $916 million of GMV, up 6% on a year-over-year basis, and revenues of $210 million, up 18% year over year on a reported basis and 19% on an FX-Neutral basis.

Classifieds platforms also performed well with contribution of $199 million of revenues, up 7% year over year on a reported basis and 10% on an FX-Neutral basis.

Gross merchandise volume grew 2% year over year on a reported basis and 5% on an Fx-neutral basis. Active buyers/customers increased 4.3% from the year-ago quarter.

Margins and Income

Pro-forma gross margin for the quarter was 77.1%, down 78 basis points (bps) year over year and 74 bps sequentially.

Cost of revenues increased 8% on a year-over-year basis primarily due to expenses associated with TicketbiS operations and the expansion of first-party inventory program in Korea.

Adjusted operating expenses of $1.1 billion increased 10.4% from the prior-year quarter but decreased 5.2% sequentially. Operating margin shrank 390 bps year over year and 196 bps sequentially to 25.3%.

Excluding the impact of intangibles amortization and other items on a tax-adjusted basis, pro-forma net income came in at $467 million compared with $481 million in the year-ago period.

Including the special items, GAAP net income was $1.03 billion (94 cents per share) compared with $482 million (41 cents per share) in the year-ago quarter.

Balance Sheet and Cash Flow

eBay’s balance sheet is highly leveraged, with total debt of $9 billion eclipsing cash and short-term investments balance of $6.8 billion. The company generated $582 million in cash from operating activities and spent $135 million on capex. Share repurchases were $350 million in the quarter.

Outlook

For the second quarter of 2017, eBay expects revenues to grow 5%–7% on an Fx-neutral basis to $2.28 billion – $2.32 billion.  Non-GAAP earnings are expected within 43 cents–45 cents. GAAP earnings per share from continuing operations are expected in the range of 20 cents - 40 cents.

In 2017, eBay expects revenues to grow 6% on an Fx-neutral basis to $9.3 billion – $9.5 billion.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There have been six revisions lower for the current quarter in the last two months. In the same time frame, the consensus estimate moved down by 6.5% due to these changes.

eBay Inc. Price and Consensus

eBay Inc. Price and Consensus | eBay Inc. Quote

VGM Scores

At this time, the stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.

The stock is suitable solely for value based on our style scores.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. The stock has a Zacks Rank #3 (Hold). We are looking for an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free eBay Inc. (EBAY) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
Zacks Investment Research