eBay expands buyback program by $3 billion

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eBay Inc. (NASDAQ:EBAY) has announced an expansion of its stock repurchase program, adding an additional $3 billion to the existing authorization. The decision, made by the company's Board of Directors on December 12, 2024, is part of eBay's ongoing strategy to manage its capital.

This extension underscores the company's commitment to delivering value to its shareholders and is indicative of its financial strength and future business prospects. With a market capitalization of $30.5 billion and an impressive 49.2% year-to-date return, InvestingPro analysis suggests eBay is currently trading below its Fair Value, making this buyback particularly strategic.

The stock buyback program at eBay does not have a set expiration date, which provides the company with flexibility in managing the repurchases. The actual timing and volume of share repurchases will hinge on several factors, including price, market conditions, and applicable legal requirements. eBay has made it clear that the program can be scaled back or halted at any time at the company's discretion.

According to InvestingPro data, the company maintains a healthy financial position with a solid gross profit margin of 72% and operates with a moderate debt level, supporting its ability to execute this buyback program effectively.

Stock repurchase programs are often implemented by companies to reduce the number of outstanding shares on the market, which can increase the value of remaining shares and earnings per share. For eBay, this move could also signal confidence in the company's financial health and the perceived undervaluation of its stock.

As of the date of the report, eBay has not specified the timing or the number of shares it plans to buy back. The company has communicated that any repurchases will be conducted within the parameters of market conditions and corporate requirements.

In other recent news, eBay has been the subject of multiple analyst adjustments following its earnings report. Bernstein maintained its Outperform rating, citing positive trends and strategic initiatives expected to drive growth. The company's Focus Vertical strategy, which targets specific categories for growth, has shown nearly 5% growth in Q3, and eBay maintains impressive gross profit margins of 72%.

However, Jefferies downgraded eBay's stock rating from "Hold" to "Underperform," citing concerns over the company's core marketplace profitability. Truist Securities raised its price target on eBay's shares, citing a positive outlook for the company's Gross Merchandise Volume (GMV) growth.

Bernstein SocGen Group upgraded eBay's rating from Market Perform to Outperform, citing the company's strategic focus on categories and use cases that resonate with its core audience. Meanwhile, Citi maintained a Buy rating on eBay stock and increased the price target, following eBay's third-quarter results, which revealed a focus on consumer-to-consumer (C2C) sales and artificial intelligence (AI) enhancements.

eBay's GMV rose over 1% to $18.3 billion, and revenue increased by more than 3% to $2.58 billion. eBay's management has launched a consumer-to-consumer (C2C) product initiative in the United Kingdom (TADAWUL:4280), which is projected to contribute positively to the company's revenue by the second half of 2025.

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