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On Thursday, BMO Capital Markets sustained its Market Perform rating on eBay stock (NASDAQ:EBAY) but increased the price target from $59.00 to $63.00. The adjustment follows eBay’s performance in the fourth quarter of 2024, where the company experienced notable growth in Focus Categories, which accelerated to 6% year-over-year, with Trading Cards and Parts & Accessories (P&A) demonstrating significant strength.
eBay reported a comprehensive beat for the fourth quarter of 2024, with these key categories contributing to the company’s robust results. BMO Capital’s analyst highlighted eBay’s effective execution, which has been reflected in the company’s recent financial outcomes. With an impressive gross profit margin of 72.02% and a market capitalization of $33.12 billion, eBay continues to demonstrate strong financial health. InvestingPro analysis reveals 8 additional key insights about eBay’s performance and potential.
Despite the positive performance, BMO Capital expressed caution due to the uncertain tariff outlook and the gross merchandise volume (GMV) guidance for the first quarter of 2025. The UK’s consumer-to-consumer (C2C) initiatives are expected to temporarily affect take-rates in the first quarter of 2025. However, the firm anticipates that buyer fees and managed shipping tailwinds will start to have a full impact in the second half of 2025. According to InvestingPro Fair Value analysis, eBay currently appears slightly undervalued, suggesting potential upside despite near-term challenges.
The decision to raise the price target is rooted in eBay’s effective strategies for engaging buyers and sellers, which BMO Capital believes have been successfully implemented. The analyst noted, "eBay is executing well, with Focus Categories growth accelerating to 6% YoY in 4Q24A and Trading Cards and P&A showing notable strength. Together, eBay produced a clean 4Q24 beat across the board."
The report concludes with a reiteration of the Market Perform rating, acknowledging the company’s solid execution but also considering the broader economic factors that may affect eBay’s performance in the near term.
In other recent news, eBay Inc. reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.25, compared to a forecast of $1.21. The company’s revenue for the quarter was $2.6 billion, slightly above the forecasted $2.58 billion. Despite these positive results, eBay’s stock experienced a significant decline in after-hours trading. Goldman Sachs raised its price target for eBay shares to $56 but maintained a Sell rating, citing challenges in the upcoming quarter due to macroeconomic uncertainties and potential tariff impacts. Citi analysts, on the other hand, reaffirmed their Buy rating with a price target of $80, highlighting eBay’s strong product innovation and strategic mergers, such as the acquisitions of Goldin and Caramel. The company has been focusing on expanding its market presence through partnerships with Facebook (NASDAQ:META) Marketplace and OpenAI Operator, and plans to repurchase at least $2 billion in shares in 2025. eBay expects low single-digit growth in gross merchandise volume (GMV) for 2025, supported by advancements in AI-enabled experiences and targeted initiatives in specific geographies. Analysts noted that eBay’s management remains committed to share buybacks, signaling confidence in the company’s financial strategy.
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