eBay (EBAY) shares jumped as much as about 5.8% on Monday, October 12, after Morgan Stanley analyst Nathan Feather named the online marketplace his top internet pick. He kept his Overweight rating and raised his price target to $132 from $127. The stock gave back part of the gain and closed up 2.2% at $114.65.
Feather’s case rests on one business: eBay Live, the company’s live-streamed shopping format. Wells Fargo isn’t convinced, and eBay’s own guidance shows why both banks have a point.
Morgan Stanley’s Live Commerce Case
Feather calls live shopping “the missing piece” behind eBay’s recent acceleration. He estimates eBay Live drove more than 40% of eBay’s gross merchandise volume (GMV) growth in fiscal 2026. He also thinks it could add about four percentage points a year to GMV growth through 2030. He describes the Western version of live shopping as a “digital auction house for secondary and collectible goods,” which plays directly to eBay’s strength in trading cards and collectibles.
The company’s own figures back the pitch. On its second-quarter call on August 5, eBay said Live GMV grew roughly eightfold from a year earlier. More than 90% of established sellers who stream regularly grew their GMV on eBay. First-time Live buyers in collectibles spent about 70% more than comparable buyers, and roughly half of that extra spending happened outside live events. In July, eBay opened Live to self-service sign-ups for eligible U.S. sellers in more than 300 categories.
What eBay’s Numbers Show
Quarterly revenue climbed from $2.58 billion in the third quarter of 2024 to $3.13 billion in the second quarter of 2026. Second-quarter revenue grew 15% as reported, or 14% on an FX-neutral basis.
So far, the growth hasn’t cost margin. TIKR’s EBIT margin was 21.57% in the second quarter, up from 19.56% a year earlier.
The mix of that growth comes with a catch. eBay’s take rate, the share of GMV it keeps as revenue, held flat at 14% in the second quarter. Chief Financial Officer Peggy Alford said faster growth in earlier-stage businesses like eBay Live offset gains from advertising and shipping. Live adds volume, but each dollar of it currently earns eBay less.
Wells Fargo’s Objection
Wells Fargo kept its Underweight rating and trimmed its target to $91 from $92, about 21% below Monday’s close. It expects eBay to beat on third-quarter GMV. But it sees earnings risk from spending on Live and consumer-to-consumer selling, plus competition from Vinted. Its fiscal 2027 EPS estimate sits 8% below consensus.
eBay’s guidance gives that view some support. For the third quarter, eBay expects organic GMV growth of 7% to 9%, down from 14% in the second quarter as it laps last year’s gains. Non-GAAP operating income is guided to grow just 1% to 5%, and the newly acquired Depop alone drags that growth down by 3 to 4 points. The spending is ramping just as the easy comparisons end.
That pressure also reaches Etsy (ETSY), which sold Depop to eBay in July. eBay plans to fund the youth-focused resale app’s growth partly by shifting its own marketing dollars toward it. That makes eBay a tougher rival in secondhand fashion.
What eBay Stock Is Worth
I wanted to know whether eBay still holds up if Wells Fargo turns out to be right, so I built my model around its concerns. I assume revenue growth averages 7.2% a year, compared with eBay’s 2026 guidance for 11% to 12% FX-neutral revenue growth, including Depop. I also assume the net income margin falls to 22.5% from the past year’s 23.8% to reflect additional spending on Live and Depop.
Even on those cautious numbers, my model lands at $146.82 by the end of 2030, implying 28.1% price appreciation from $114.65, or about 6% a year, excluding dividends. That’s above Morgan Stanley’s $132. But the yearly return is modest, partly because the stock has already rallied about 30% this year.
October 28 Will Settle the eBay Debate
eBay is expected to report third-quarter results on October 28. Morgan Stanley’s case needs core GMV to land at the top of the 7% to 9% range with Live still compounding. Wells Fargo’s case needs operating income growth near the 1% bottom of guidance. The number to watch is the full-year non-GAAP operating income outlook. If eBay holds its 10% to 12% growth target while spending on Live and Depop, the bull case wins this round.
Think my assumptions are too cautious, or too generous? Build your own eBay model on TIKR in about 60 seconds for free, starting from Wall Street’s consensus estimates. Learn more here.
So what is eBay stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
