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eBay Inc EBAY

Morningstar Rating
$51.31 −0.58 (1.12%)
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Company Report

EBay: Increasing Our Valuation to Better Capture Impact of Adevinta Stake

We're increasing our fair value estimate for narrow-moat eBay to $54 from $51 as we better incorporate the impact of the planned sale of its stake in Norwegian Classifieds business Adevinta to a private equity consortium led by Blackstone and Permira. More concretely, we've added an enterprise value adjustment for the roughly 20% stake that eBay will continue to hold in the private company, assuming the deal should close in the second quarter of 2024. We estimate that the value of that stake is now roughly $1.3 billion, or $2.50 per share, and is net of taxes and a 25% discount for lack of liquidity, or DLOL. We'd previously only included those shares which would be monetized at deal closure in our fair value estimate. Still, we now believe that our prior view failed to capture the economic value of that deal to eBay fully. Shares trade in a range we'd consider fairly priced.

Price vs Fair Value

EBAY is trading at a 4% discount.
Price
$51.89
Fair Value
$62.00
Uncertainty
High
1-Star Price
$81.90
5-Star Price
$13.20
Economic Moat
Pnyttz
Capital Allocation
Kdqhjvsny

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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News

Trading Information

Previous Close Price
$51.89
Day Range
$51.0552.00
52-Week Range
$37.1752.93
Bid/Ask
$51.00 / $51.30
Market Cap
$26.58 Bil
Volume/Avg
4.2 Mil / 7.0 Mil

Key Statistics

Price/Earnings (Normalized)
12.26
Price/Sales
2.74
Dividend Yield (Trailing)
1.94%
Dividend Yield (Forward)
2.06%
Total Yield
6.86%

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 U.K., Germany, and Australia.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Mid Value
Total Number of Employees
12,300

Competitors

Valuation

Metric
EBAY
MELI
BABA
Price/Earnings (Normalized)
12.2672.778.42
Price/Book Value
4.2024.681.31
Price/Sales
2.745.271.46
Price/Cash Flow
10.9722.807.12
Price/Earnings
EBAY
MELI
BABA

Financial Strength

Metric
EBAY
MELI
BABA
Quick Ratio
2.260.911.71
Current Ratio
2.441.271.80
Interest Coverage
14.323.2093.02
Quick Ratio
EBAY
MELI
BABA

Profitability

Metric
EBAY
MELI
BABA
Return on Assets (Normalized)
10.91%9.21%8.98%
Return on Equity (Normalized)
40.21%59.40%15.96%
Return on Invested Capital (Normalized)
16.36%15.38%12.33%
Return on Assets
EBAY
MELI
BABA
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