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With a market cap of $32.2 billion, eBay Inc. (EBAY) is a global online marketplace that enables users to buy and sell products through auctions or direct sales. Originally launched as a small, community-driven auction site, it has since transformed into a massive e-commerce platform with millions of buyers and sellers worldwide.
Shares of the e-commerce firm have significantly outperformed the broader market over the past 52 weeks. EBAY has soared 60.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.9%. Moreover, shares of EBAY are up 8.4% on a YTD basis, lagging behind SPX’s 1.9% gain.
Focusing more closely, the San Jose, California-based company has outpaced the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 29.7% return over the past 52 weeks and a 2.5% YTD gain.
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Despite eBay reporting better-than-expected Q3 adjusted EPS of $1.19 per share and revenue of $2.6 billion on Oct. 30, shares tumbled 8.2% the following day due to disappointing guidance for the holiday season. The company projected Q4 revenue between $2.5 billion and $2.6 billion and adjusted EPS of $1.17 to $1.22, falling below the consensus estimate. Analysts from Jefferies and Deutsche Bank raised concerns about eBay’s GMV outlook, which was projected at $18.9 billion to $19.3 billion, with Jefferies warning that "cracks" were "starting to form" in the company's growth. Additionally, uncertainty surrounding consumer demand and the lack of a significant GMV acceleration in Q4 rattled investor confidence, leading to the sharp decline in stock price.
For fiscal 2024, which ended in December, analysts expect EBAY’s EPS to grow 22.9% year-over-year to $3.86. The company's earnings surprise history is mixed. It met or topped the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 29 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” 17 “Holds,” one “Moderate Sell,” and one “Strong Sell.”
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On Feb. 3, Wells Fargo raised eBay’s price target to $61 while maintaining an “Equal-Weight” rating, citing a U.S. commission fee increase expected to add $75 million in revenue and $0.13 EPS in 2025. However, the firm noted its revised 2025 operating income remains 2% below consensus.
As of writing, eBay is trading above the mean price target of $64.03. The Street-high price target of $75 implies a potential upside of 11.6% from the current price levels.