eBay (EBAY) AI Stock Analysis

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eBay

(NASDAQ:EBAY)

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Neutral 63 (OpenAI - 5.2)

Rating:63Neutral

Price Target:

$88.00

▲(4.38% Upside)

Action:ReiteratedDate:02/19/26

EBAY scores as a solid but not top-tier setup: strong profitability and ongoing cash generation support the score, reinforced by upbeat guidance and significant shareholder returns. The main drags are meaningful leverage and recent cash-flow softening, while technical indicators show a weak price trend and negative momentum that limit near-term attractiveness despite reasonable valuation.

Positive Factors

Cash generation & profitability

Sustained margins (TTM ~18% net, ~25% EBITDA) and positive operating/free cash flow create a durable cash engine. That supports repeatable investment in product, strategic M&A, and material capital returns without relying on cyclical market timing, preserving optionality over the next 2–6 months.

Marketplace scale & recommerce mix

A large, growing recommerce and C2C base (40%+ of GMV, ~2/3 of GMV) gives eBay structural differentiation and network effects. High mix of preowned listings supports durable GMV resilience, repeat engagement, and margin stability as listed breadth and supply barriers sustain competitive position.

Product innovation and advertising growth

AI-driven product improvements (big cuts in listing time and higher listing/sell rates) combined with a ~$2B advertising business create sustainable revenue diversification and improved unit economics. Product-led efficiency and ad monetization improve seller economics and lock in platform engagement over time.

Negative Factors

Meaningful leverage

Debt running near 1.5x equity and gross debt exceeding cash cushions balance-sheet flexibility. That constraint reduces optionality for large undoable investments, makes buyback/dividend policies more contingent on cash cycles, and raises refinancing and covenant risk across the medium term.

Margin pressure from shipping & accounting changes

Scale-up of managed-shipping programs is currently loss-making and accounting shifts (expensing internal software, netting U.K. managed shipping) will reduce reported capitalization and take-rates. These structural changes compress near-term margins and could limit operating-leverage benefits for multiple quarters.

International and cross-border headwinds

Weak international GMV and trade-policy-driven cross-border disruption reduce a key growth lever. Sluggish buyer growth abroad and policy uncertainty can depress take rates and cross-border volume mix, limiting GMV upside and making U.S.-centric growth more critical to sustaining companywide momentum.

eBay (EBAY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$37.15B

Dividend Yield1.38%

Average Volume (3M)5.32M

Price to Earnings (P/E)18.9

Beta (1Y)0.42

Revenue Growth4.89%

EPS Growth17.30%

CountryUS

Employees11,500

SectorConsumer Cyclical

Sector Strength84

IndustrySpecialty Retail

Share Statistics

EPS (TTM)1.41

Shares Outstanding452,000,000

10 Day Avg. Volume6,895,141

30 Day Avg. Volume5,320,062

Financial Highlights & Ratios

PEG Ratio1.67

Price to Book (P/B)8.51

Price to Sales (P/S)3.54

P/FCF Ratio23.65

Enterprise Value/Market Cap1.19

Enterprise Value/Revenue3.97

Enterprise Value/Gross Profit5.56

Enterprise Value/Ebitda15.80

Forecast

1Y Price Target

$99.00

Price Target Upside17.42% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering23

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

eBay Business Overview & Revenue Model

Company DescriptioneBay Inc. operates marketplace platforms that connect buyers and sellers in the United States and internationally. The company's Marketplace platform includes its online marketplace at ebay.com and the eBay suite of mobile apps. Its platforms enable users to list, buy, sell, and pay for items through various online, mobile, and offline channels that include retailers, distributors, liquidators, import and export companies, auctioneers, catalog and mail-order companies, directories, search engines, commerce participants, shopping channels, and networks. The company was founded in 1995 and is headquartered in San Jose, California.

How the Company Makes MoneyeBay generates revenue primarily through its marketplace services, which include listing fees, final value fees, and subscription fees from sellers. When a seller lists an item on eBay, they may pay a listing fee, and once the item sells, eBay charges a final value fee, which is a percentage of the total sale price. Additionally, eBay offers subscription plans for sellers that provide benefits such as increased visibility and reduced fees. Beyond marketplace transactions, eBay earns revenue from advertising services, where sellers can promote their listings on the platform. The company has also invested in payment processing through its partnership with Adyen, enhancing transaction efficiency and security, which contributes to its overall earnings.

eBay Key Performance Indicators (KPIs)

Any

Active Buyers

Active Buyers
Measures the number of unique buyers who have made a purchase on eBay, indicating the platform's reach, customer engagement, and potential for sales growth.

Chart InsightseBay's active buyer base has stabilized after a decline from its 2021 peak, maintaining around 132 million since 2023. Despite this plateau, the latest earnings call highlights robust growth in key financial metrics and strategic categories, such as collectibles and fashion, driven by AI and shipping innovations. While active buyers remain steady, eBay's focus on enhancing user engagement and expanding eBay Live suggests potential for future growth. However, challenges from trade policy changes and international macroeconomic conditions could impact future buyer acquisition efforts.

Data provided by:

The Fly

eBay Earnings Call Summary

Earnings Call Date:Feb 18, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 06, 2026

Earnings Call Sentiment Positive

The call presented strong execution: accelerating GMV and revenue growth, meaningful advertising and AI-driven product momentum, robust Q4 results, substantial capital returns, strategic M&A (Depop) and exceeded sustainability targets. Offsetting risks include international macro weakness, trade-policy-driven cross-border pressure, margin pressure from scaling shipping/managed programs, accounting changes that will affect 2026 metrics, and near-term dilution from the Depop acquisition. On balance, the company conveyed sustained momentum, healthy guidance, and multiple growth levers despite several manageable headwinds.

Q4-2025 Updates

Positive Updates

Full-Year GMV and U.S. Strength

Gross merchandise volume grew nearly 6% to approximately $80 billion in 2025, with U.S. GMV growing nearly 10%, driven by broad-based strength across strategic priorities.

Recommerce and Strategic Mix

Recommerce (preowned and refurbished) comprised over 40% of GMV in 2025; focus categories, C2C and recommerce made up ~2/3 of the business (> $50 billion GMV) and that segment grew ~10%.

Revenue and Advertising Growth

Full-year revenue increased nearly 7% to $11.1 billion; advertising annual revenue reached approximately $2 billion and was a key driver of revenue outperformance.

Profitability and EPS Improvement

Non-GAAP operating income grew roughly 7% to nearly $3.1 billion for the year; non-GAAP EPS grew ~13% to $5.52, and the company returned about $3 billion to shareholders (repurchases + dividends).

Strong Q4 Results

Q4 GMV grew over 8% to $21.2 billion; revenue grew over 13% to $2.96 billion; non-GAAP operating income rose over 11% to $775 million; non-GAAP EPS was $1.41 (nearly 13% YoY).

AI and Product Innovation Impact

Next-gen AI-native magical listing reduced average listing time by >25%, increased new listing creation rate by >50%, produced double-digit increases in sold items and GMV per lister, and achieved >95% customer satisfaction. Trading-card AI scanning scanned over 15 million cards since launch.

eBay Live Traction

eBay Live is scaling rapidly with an annualized run-rate ~7x YoY, multi-country launches (Germany, Australia, France, Italy, Canada), and a single-event Black Friday record of ~ $2 million in sales.

Strategic Acquisitions to Grow C2C

Definitive agreement to acquire Depop for ~ $1.2 billion cash; Depop facilitated ~ $1 billion GMS in 2025 and grew ~60% YoY in the U.S.; expected to contribute 1-2 percentage points to 2026 GMV growth (with near-term modest dilution).

Environmental and Sustainability Targets Exceeded

Exceeded 2021-2025 impact goals: ~ $25 billion in cumulative positive economic impact (vs $22B target), prevented ~8.2M metric tons of CO2 (above 8M target) and diverted >360k metric tons of waste (vs 350k target).

Q1 and 2026 Financial Guidance

Q1 GMV guide $21.5B–$21.9B (10%-12% FX-neutral growth); Q1 revenue guide $3.00B–$3.05B (13%-15% FX-neutral); Q1 non-GAAP operating income growth 11%-16% and EPS $1.53–$1.59 (12%-16%). Full-year 2026 planning assumes GMV similar to 2025 and non-GAAP operating income growth 8%-10%.

Negative Updates

International Weakness

International GMV declined nearly 1% on an organic FX-neutral basis (FX provided ~290 bps tailwind to spot GMV); Europe (U.K. and Germany) pressured by weak macro and subdued retail trends.

Trade Policy Headwinds and Cross-Border Pressure

U.S. import pressure from trade policy changes (e.g., removal of de minimis exemption) dented cross-border volume growth and created lapping and mix headwinds impacting take rate.

Margin and Transaction Losses

Non-GAAP gross margin declined ~80 basis points to 72.1% in Q4; non-GAAP operating margin was 26.1% as marketing efficiencies were offset by product development and transaction losses tied to scaled shipping programs (initially loss-making).

Accounting Changes Impacting 2026 Metrics

Adoption of new internal-use software standard (expensing product development) and moving U.K. managed shipping to net revenue recognition will modestly pressure capitalization metrics and take rate in 2026; managed shipping revenue will face lapping pressure.

Near-Term Dilution from Depop Acquisition

Depop acquisition expected to represent a low single-digit headwind to 2026 operating income growth and dilute non-GAAP EPS by low single digits (foregone interest on cash), with accretion anticipated by 2028.

Durability Concerns in Some Categories

Some recently accelerated areas (bullion, collectible coins) are expected to moderate after Q1; specific pockets like Pokemon decelerated due to tougher comps despite overall collectible strength.

Sluggish Buyer Growth Internationally

Trailing 12-month active buyers ~135 million (excluding Tise ~134M, organic growth ~1% YoY); international enthusiast buyer counts were pressured and some buyers fell below volume/frequency thresholds.

Balance Sheet and Cash/Leverage Dynamics

Q4 free cash flow was $478 million with cash and fixed income investments of $4.8 billion and gross debt of $6.7 billion, indicating higher gross debt than cash on the balance sheet.

Company Guidance

eBay guided Q1 2026 GMV of $21.5–$21.9 billion (FX‑neutral growth 10–12% YoY; ~450 bps FX tailwind to spot), revenue of $3.0–$3.05 billion (FX‑neutral +13–15%; ~310 bps FX tailwind) — implying roughly a 3‑point delta between FX‑neutral revenue and GMV — non‑GAAP operating income growth of 11–16% with margins of 28.3–29.2%, and non‑GAAP EPS of $1.53–$1.59 (+12–16% YoY). For full‑year 2026 (ex‑Depop) management plans FX‑neutral GMV growth similar to 2025, revenue in line to slightly ahead of GMV, non‑GAAP operating income growth of 8–10%, non‑GAAP tax rate assumed at 17.5%, and CapEx of 4–5% of revenue. Capital allocation targets roughly $2 billion of buybacks in 2026 (Board added $2 billion repurchase authorization on top of ~$800 million remaining) and a Q1 dividend of $0.31; in a normal year they target returning 90–100% of free cash flow. The pending $1.2 billion cash Depop deal (expected close Q2) is forecast to add 1–2 pts to 2026 FX‑neutral GMV, act as a low‑single‑digit headwind to near‑term operating income and EPS growth, and be accretive to non‑GAAP operating income by 2028; accounting changes (internal‑use software expensing and U.K. managed‑shipping net revenue recognition) were also disclosed.

eBay Financial Statement Overview

Summary

Profitable and cash-generative (TTM ~18% net margin, ~25% EBITDA margin; positive operating cash flow and free cash flow), with modestly improving TTM revenue growth (~+3.6%). Offsets are meaningful leverage (~1.5x debt-to-equity), equity trending down, softer TTM free cash flow versus prior year (FCF growth about -5%), and historical earnings volatility.

Income Statement

Positive

EBAY shows solid profitability in TTM (Trailing-Twelve-Months) with an ~18% net margin and ~25% EBITDA margin, supported by consistently high gross margin (~71%+). Revenue growth has re-accelerated in TTM (about +3.6%) after a largely flat 2024, but profitability has been volatile across the cycle (notably a loss in 2022 and unusually elevated profits in 2020–2021), which tempers the score despite currently healthy earnings.

Balance Sheet

Neutral

Leverage remains meaningful, with debt running at roughly 1.5x equity in both 2024 and TTM (Trailing-Twelve-Months), indicating less balance-sheet flexibility than lower-leverage peers. Equity has also trended down from 2023 to TTM, though returns on equity are strong (TTM around mid-40% range), reflecting solid profitability on the current capital base. Overall: good earnings power, but debt levels keep the balance sheet in the mid-tier.

Cash Flow

Positive

Cash generation remains healthy with positive operating cash flow and free cash flow in TTM (Trailing-Twelve-Months), but both have stepped down versus 2023–2024 (free cash flow growth about -5% TTM). Free cash flow is reasonably supported by earnings (roughly three-quarters of net income in TTM), yet the cash conversion profile is not improving, which limits upside to the score.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.10B	10.28B	10.11B	9.79B	10.42B
Gross Profit	7.93B	7.40B	7.28B	7.12B	7.77B
EBITDA	2.79B	2.86B	4.37B	-924.00M	1.17B
Net Income	2.03B	1.98B	2.77B	-1.27B	13.61B
Balance Sheet
Total Assets	17.61B	19.36B	21.62B	20.85B	26.63B
Cash, Cash Equivalents and Short-Term Investments	2.92B	6.22B	9.02B	7.51B	7.32B
Total Debt	7.38B	7.86B	8.23B	9.42B	9.43B
Total Liabilities	12.99B	14.21B	15.22B	15.70B	16.85B
Stockholders Equity	4.62B	5.16B	6.40B	5.15B	9.78B
Cash Flow
Free Cash Flow	1.66B	1.96B	1.97B	1.80B	2.21B
Operating Cash Flow	2.19B	2.41B	2.43B	2.25B	2.66B
Investing Cash Flow	1.19B	2.21B	240.00M	2.46B	3.66B
Financing Cash Flow	-3.66B	-3.81B	-2.45B	-3.79B	-6.53B

eBay Technical Analysis

Technical Analysis Sentiment

Negative

Last Price84.31

Price Trends

50DMA

88.10

Negative

100DMA

87.56

Negative

200DMA

85.08

Negative

Market Momentum

MACD

-1.73

Positive

RSI

45.19

Neutral

STOCH

72.28

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EBAY, the sentiment is Negative. The current price of 84.31 is below the 20-day moving average (MA) of 87.71, below the 50-day MA of 88.10, and below the 200-day MA of 85.08, indicating a bearish trend. The MACD of -1.73 indicates Positive momentum. The RSI at 45.19 is Neutral, neither overbought nor oversold. The STOCH value of 72.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EBAY.

eBay Risk Analysis

eBay disclosed 28 risk factors in its most recent earnings report. eBay reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

eBay Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MELI	73 Outperform	$101.85B	48.73	40.65%	―	38.01%	44.52%
JD	70 Outperform	$39.35B	9.26	13.68%	3.37%	16.54%	-3.61%
SE	70 Outperform	$66.77B	49.01	15.66%	―	35.85%	1336.48%
EBAY	63 Neutral	$37.15B	18.94	40.85%	1.38%	4.89%	17.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CPNG	60 Neutral	$32.97B	87.32	8.73%	―	16.63%	-62.54%
ETSY	55 Neutral	$4.35B	33.65	―	―	1.98%	-20.98%

* Consumer Cyclical Sector Average

Performance Comparison

EBAY

eBay

84.31

14.45

20.68%

MELI

Mercadolibre

1,864.46

-304.14

-14.02%

27.23

-12.84

-32.04%

ETSY

Etsy

52.37

-0.76

-1.43%

Sea

111.24

-12.68

-10.23%

CPNG

Coupang

18.58

-5.59

-23.13%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 19, 2026