Benchmark lifts eBay stock price target to $75 from $65

On Thursday, Benchmark analyst Daniel Kurnos raised the price target on eBay (NASDAQ:EBAY) shares to $75 from the previous target of $65, while maintaining a Buy rating on the stock. The new target aligns with broader market sentiment, as InvestingPro data shows eBay’s impressive 58.78% return over the past year and current analyst targets ranging from $49 to $80. Kurnos acknowledged eBay’s performance, noting the company exceeded consensus expectations, although he suggested the outperformance might be less pronounced compared to others who benefited from a strong holiday shopping season.

eBay concluded the year on a high note, surpassing key performance indicators (KPIs) for 2024, supported by robust financial metrics including a 72.02% gross profit margin and healthy market capitalization of $30.13 billion. However, the analyst expressed concerns about the company’s first quarter and full-year 2025 outlook, which may disappoint the investment community despite recent announcements regarding Total (EPA:TTEF) Addressable Market (TAM) expansion. Kurnos pointed out that eBay’s guidance seems conservative, considering potential tariff impacts and the broader economic environment. For deeper insights into eBay’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional metrics.

The analyst also highlighted that eBay managed to meet or exceed the high-end of all their KPIs in 2024. Nevertheless, he noted the company’s flat margins and decelerating growth, which could be influenced by calendar effects like Leap Year and Easter comparisons, could temporarily disrupt eBay’s momentum.

Looking ahead, Kurnos posed two considerations for evaluating eBay’s prospects: the degree of conservatism in the company’s guidance and the potential growth contributions from Caramel and Facebook (NASDAQ:META) Marketplace over the next two years. With eBay’s new $3 billion buyback program (one of several InvestingPro Tips highlighting management’s aggressive share repurchases), increasing consumer-to-consumer (C2C) growth, sustained advertising momentum, and greater managed shipping penetration, all expected to drive up the take rate, there is anticipation for the first quarter to mark a restart in growth. Trading at a P/E ratio of 15.72 and maintaining a steady dividend growth rate of 8%, Kurnos suggested that the risk/reward balance for eBay might not be as favorable as for other companies in the sector.

In other recent news, eBay Inc. reported its fourth-quarter 2024 earnings, exceeding expectations with an earnings per share (EPS) of $1.25, compared to the forecast of $1.21. The company’s revenue for the quarter was $2.6 billion, slightly above the projected $2.58 billion. Despite these positive results, eBay’s first-quarter guidance fell short of market expectations, indicating a challenging demand environment ahead. Analyst firms have responded with varying adjustments to their price targets for eBay. Stifel lowered its target to $63 while maintaining a Hold rating, citing international growth challenges. In contrast, BMO Capital Markets raised its target to $63, highlighting eBay’s effective execution and growth in Focus Categories. Citi maintained a Buy rating with an $80 target, emphasizing eBay’s product innovation and strategic acquisitions. Meanwhile, Goldman Sachs increased its price target to $56 but maintained a Sell rating, noting potential headwinds in the discretionary eCommerce market. These developments reflect a mixed outlook for eBay as it navigates through economic uncertainties and strategic initiatives.

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