EBay Inc. vs. Visa

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An e-commerce player stock takes on financial payment service in this first-round matchup in the marketplace.

Apparently, eBay Inc. and Visa Inc. looks very different from one another, but if we closely look at these companies they have one big thing in common. As we know Visa is the biggest payment services in the world, whereas the most important thing which eBay has is its possession of PayPal.

It may certainly be true to say that these companies did not have much in common further than that. EBay is basically an e-commerce firm provides business solutions. While, Visa provides financial services along with payment solution.  EBay is public limited company for almost 20 years now, however Visa had its initial public offering took place on March 18th 2008.

But the most important portion that counts is the performance of share price. Both the companies do not have much different in it, nevertheless not how they have performed in the present bullish market. Truly not are equally beaters of the market.

Obviously, previous results are not stubby for returns in future. If we are to choose any one of the company to bet for the growth in future, what will we choose? A giant in e-commerce industry with a fresh payment services or the monarch of digital funds transfer. Let’s take a look at head to head of the firms.

EBay has one finest thing which is also its worst thing. It is nearly completely dependable on PayPal which contributed almost 45% of revenue in eBay’s fourth quarter lately. Whenever one part of the similar company is growing rapidly and the other one is depending on it , the best thing to do is detached them and that’s what eBay has done with PayPal by spinning it off.

The e-commerce company was under pressure from Carl Icahn –an activist investor to spin off PayPal –its payment system into a publicly held company possessed by the stock holders of eBay. Until now this was the greatest thing for the shareholders owning company’s stock.

On the other hand, Visa has been crushing the market from past 52 weeks and witnessing fresh growth chances coming all the time.

A gradually increasing digital market is constantly creating demand for debit and credit card transactions, which provides Visa the platform to grow bigger.

Analysts are expecting the financial services company to display a yearly growth of 17% for coming 5 years and revenue to increase by over 10% in the coming few years.

In the end, with the slow growth in marketplace and inability to compete, eBay share outperformed. It went up by 480% from 2009 as compared to Visa stock which went up by 440%.

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