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Valued at a market cap of $30.4 billion, eBay Inc. (EBAY) operates marketplace platforms that connect buyers and sellers across various categories, including electronics, fashion, collectibles, and automotive parts. The San Jose, California-based company's marketplace platform includes its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and eBay fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the internet retail industry. Its unique auction-style and fixed-price selling formats provide flexibility for both casual users and professional sellers. The company benefits from strong brand recognition and AI-driven personalized recommendations that enhance the user experience. Additionally, its low-inventory business model allows for high scalability and profitability, while its focus on sustainability and circular commerce aligns with evolving consumer trends.
Despite its notable strength, thee-commerce company slipped 6.2% from its 52-week high of $71.61, achieved on Feb. 26. Shares of eBay have surged 5.1% over the past three months, outpacing the broader Nasdaq Composite’s ($NASX) 8.4% decline during the same time frame.
In the longer term, EBAY has rallied 29.7% over the past 52 weeks, outperforming NASX’s 9.8% uptick. Moreover, on a YTD basis, shares of EBAY are up 8.5%, compared to NASX’s 8.1% fall.
To confirm its bullish trend, eBay has been trading above its 200-day moving average since the past year and has remained above its 50-day moving average since late November, 2024, with some fluctuations.
On Feb. 26, EBAY released its Q4 earnings results. The company posted adjusted EPS of $1.25, which increased 16.8% from the year-ago quarter and topped the consensus estimates of $1.20. Its revenue reached $2.6 billion, reflecting a slight year-over-year increase and meeting Wall Street’s forecast.
Despite this, eBay’s shares tumbled 8.2% the following day, largely due to its underwhelming Q1 revenue guidance. Management projects Q1 revenue to grow 1% at most, a pace consistent with recent trends but falling short of investor expectations. Optimism had been building around potential growth acceleration, especially with Meta Platforms, Inc. (META) allowing eBay listings on Facebook Marketplace. However, the muted guidance confirmed ongoing sluggish expansion, leading to investor disappointment and a sharp decline in the stock price.
EBAY has lagged behind its rival, MercadoLibre, Inc. (MELI), which gained 36% over the past 52 weeks and 21.5% on a YTD basis.
Looking at EBAY’s recent outperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 30 analysts covering it. As of writing, the company is trading above its mean price target of $66.36 and the Street-high price target of $80 represents a modest 19% upside potential from the current levels.
