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Tuesday, UBS analyst Stephen Ju increased the price target on eBay (NASDAQ:EBAY) stock to $73 from the previous $72, while keeping a Neutral rating on the shares. The adjustment comes as eBay, currently trading at $66.98 with a market capitalization of $31.14 billion, is set to announce its first-quarter 2025 financial results on April 30. According to InvestingPro analysis, the company maintains a "GOOD" financial health rating and appears slightly undervalued based on its Fair Value assessment.
Ju’s revision reflects a modest decrease in Gross Merchandise Volume (GMV) estimates, attributed to macroeconomic challenges and currency fluctuations observed throughout the quarter. Despite these challenges, eBay maintains impressive gross profit margins of 72% and trades at a reasonable P/E ratio of 16.7x. Additionally, the valuation parameters were rolled forward to the twelve months ending in the first quarter of 2027, previously set to the fourth quarter of 2026.
The new price target represents a slight uptick as UBS recalibrates its outlook on the online marketplace. The maintained Neutral rating indicates that while eBay may face certain headwinds, the company’s stock is currently valued in line with UBS’s expectations.
Investors are closely monitoring how potential tariffs could affect eBay’s GMV growth, especially considering that cross-border transactions constitute about 20% of eBay’s total GMV. Revenue from Chinese-based merchants represents around 11% of the total, with approximately half of that likely affected by the elimination of de minimis, which could impact 5-6% of eBay’s total GMV.
As eBay prepares to share its latest financial performance, market participants will be looking for signs of how the company is navigating the mentioned macroeconomic factors and any potential tariff impacts on its business model. The company currently offers a 1.75% dividend yield and has demonstrated consistent profitability. For deeper insights into eBay’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, eBay’s fourth-quarter earnings report revealed an earnings per share (EPS) of $1.25, marking a 16% year-over-year increase, although the revenue of $2,579 million was slightly below expectations. The company’s strategic initiatives, such as shifting consumer-to-consumer fees to buyers in the U.K., have led to an increase in local listings, indicating a positive market response. Benchmark analysts have highlighted eBay’s resilience amidst tariff challenges and economic difficulties in Europe, noting a positive trend in active buyers. Stifel has maintained a Hold rating for eBay, with a price target of $63.00, recognizing the company’s efforts to navigate global eCommerce challenges. Meanwhile, Susquehanna raised its price target to $65.00, reflecting optimism following eBay’s strong fourth-quarter performance, although they maintained a Neutral rating due to macroeconomic pressures. Evercore ISI also slightly increased its price target to $63.00, acknowledging eBay’s positive momentum despite facing revenue pressures. CFRA reiterated a Buy rating with a $76.00 target, citing eBay’s strong performance in focus areas like collectibles and luxury fashion, and potential growth from new listings on Facebook (NASDAQ:META) Marketplace. eBay’s integration of artificial intelligence to enhance consumer tools and backend processes was noted as a key component of its operational strategy. These developments collectively underscore eBay’s strategic adaptations amid ongoing economic uncertainties.
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