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On Thursday, Goldman Sachs analyst Eric Sheridan updated the price target for eBay (NASDAQ:EBAY) shares, increasing it slightly to $56.00 from the previous $55.00, while keeping a Sell rating on the stock. Currently trading at $69.14, near its 52-week high of $71.61, eBay has demonstrated impressive performance with a 58.78% return over the past year. Sheridan’s commentary followed eBay’s Q4’24 earnings report, which he noted delivered solid results that met the high end of the company’s guidance for gross merchandise volume (GMV) and revenue, with profitability surpassing expectations. According to InvestingPro, the company maintains robust gross profit margins of 72.02%.
Despite the strong performance in the fourth quarter, eBay’s guidance for Q1’25 suggested a more challenging demand environment than Goldman Sachs analysts had anticipated. The company’s management pointed to several headwinds, including a weaker market for discretionary eCommerce purchases, broader macroeconomic uncertainties, and potential volatility from new tariffs. Additionally, eBay’s revenue continues to be affected by the gradual implementation of its UK consumer-to-consumer (C2C) initiative. With a market capitalization of $33.12 billion and annual revenue of $10.27 billion, eBay maintains a solid financial position. InvestingPro analysis reveals 8 additional key insights about eBay’s financial health and market position, available to subscribers.
Looking ahead to the rest of 2025, eBay has outlined several key points in its strategy. The company expects GMV growth on a foreign exchange neutral (FXN) basis to be in the low single digits (LSD%) year-over-year, with revenue growth slightly higher. This outlook is supported by advancements in horizontal innovations, such as AI-enabled experiences, targeted initiatives in specific geographies like the UK C2C, and the continued strength of focus categories. eBay also anticipates that advertising and financial services will contribute to take rate tailwinds.
In terms of profitability, eBay projects that non-GAAP operating margins will remain largely stable in 2025 on an FXN basis. Operating income is forecasted to grow in line with revenue. The company also reiterated its expectation for high single digits (HSD%) year-over-year growth in non-GAAP earnings per share (EPS), backed by at least $2 billion in share repurchases.
Sheridan’s assessment, which maintains the Sell rating, reflects a cautious stance on eBay’s stock, despite the modest increase in the price target to $56. The analysis takes into account the company’s latest financial results, forward-looking guidance, and strategic initiatives as it navigates through the current economic landscape. Trading at a P/E ratio of 17.47, eBay’s stock appears slightly overvalued according to InvestingPro’s Fair Value analysis. Discover comprehensive valuation metrics and detailed financial analysis in the Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.
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 the forecast of $1.21. Revenue for the quarter was $2.6 billion, slightly above the anticipated $2.58 billion. Despite these positive results, eBay’s stock experienced a significant decline in after-hours trading. The company announced plans for at least $2 billion in share repurchases in 2025, indicating strong confidence in its financial health. Additionally, eBay has been expanding its AI capabilities and partnerships, which are expected to drive future growth. The company acquired Caramel to enhance its vehicle sales strategy, aiming to provide a secure end-to-end online vehicle purchase experience. Furthermore, eBay’s initiatives in the UK C2C market have shown promising results, contributing to double-digit growth in GMV for the region. Analyst firms like MoffettNathanson and Deutsche Bank (ETR:DBKGn) have taken interest in eBay’s strategic moves, suggesting a focus on the company’s innovation and market expansion efforts.
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