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eBay Inc EBAY

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Stock XNAS Rating as of
$54.22 +0.87 (1.63%)
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As of Delayed Price Closed
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EBay: Adevinta Sale Closes With No Change to Fair Value Estimate; Shares Fairly Priced

Sean Dunlop

The sale of narrow-moat eBay's stake in classified business Adevinta to a private equity consortium led by Permira and Blackstone has closed, effective May 29, 2024. Consistent with expectations, eBay receives $2.4 billion in taxable proceeds in exchange for a 22% stake in the business, leaving the online marketplace with an 18% share of the now-private company. The consortium maintains a six-month option to buy up to 10% more of eBay's Adevinta shares (that is, 56% of its remaining stake), which, if exercised, would reduce the firm's interest in the private business to just 8%. If the call option were exercised, it would prove slightly accretive to our $54 fair value estimate, given that we assign a 25% discount for lack of liquidity to the company's shares of the private entity. As it stands, we expect to make no changes to our intrinsic valuation, leaving shares trading in a range we'd consider fairly priced.

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Price vs Fair Value

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EBAY is trading within a range we consider fairly valued.
Price
$54.22
Fair Value
$67.00
Uncertainty
High
1-Star Price
$76.40
5-Star Price
$48.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The firm's managed payments rollout was executed seamlessly, and offers optionality for auxiliary financial services down the line.

Bears

The firm's lack of proprietary logistics operations and first-party inventory will likely see eBay continue to donate market share in the e-commerce channel more broadly.

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Trading Information

Previous Close Price
$53.35
Day Range
$53.02–54.25
52-Week Range
$37.17–55.15
Bid/Ask
$54.20 / $54.40
Market Cap
$27.22 Bil
Volume/Avg
7.4 Mil / 6.2 Mil

Key Statistics

Price/Earnings (Normalized)
12.38
Price/Sales
2.82
Dividend Yield (Trailing)
1.92%
Dividend Yield (Forward)
1.99%
Total Yield
7.62%

Company Profile

EBay operates one of the largest e-commerce marketplaces in the world, with $73 billion in 2023 gross merchandise volume, or GMV, rendering the firm a top 10 global e-commerce company. The company generates revenue from listing fees, advertising, revenue-sharing arrangements with service providers, and managed payments, with its platform connecting more than 130 million buyers and roughly 20 million sellers across almost 190 global markets at the end of 2023. EBay generates just north of 50% of its GMV in international markets, with a large presence in the UK, Germany, and Australia.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Mid Value
Total Number of Employees
12,300
Website
https://www.ebay.com

Competitors

Valuation

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Metric
EBAY
BABA
MELI
Price/Earnings (Normalized)
 12.381.1384.00
Price/Book Value
 4.401.3825.81
Price/Sales
 2.821.515.57
Price/Cash Flow
 10.627.2625.30
Price/Earnings
EBAY
BABA
MELI

Financial Strength

Metric
EBAY
BABA
MELI
Quick Ratio
 2.261.710.90
Current Ratio
 2.441.801.27
Interest Coverage
 14.3293.024.50
Quick Ratio
EBAY
BABA
MELI

Profitability

Metric
EBAY
BABA
MELI
Return on Assets (Normalized)
 11.08%4.42%9.25%
Return on Equity (Normalized)
 39.49%7.83%56.43%
Return on Invested Capital (Normalized)
 16.62%7.04%16.69%
Return on Assets
EBAY
BABA
MELI
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