Key Stats for eBay Stock
- Price change for eBay stock: -6%
- $EBAY Stock Price as of Aug. 3: $107
- 52-Week High: $119
- $EBAY Stock Price Target: $111
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What Happened?
eBay (EBAY) stock dropped 4% on Monday after Wells Fargo downgraded the shares to Underweight from Equal Weight. The bank pointed to rising competition in the U.S. as the main reason it expects eBay’s earnings estimates to head lower.
- Analyst Ken Gawrelski cut his fiscal 2027 earnings per share estimate by 10%, putting it 9% below what the rest of Wall Street expects.
- The main driver here is eBay’s Depop acquisition, which officially closed on July 30.
- Wells Fargo says the deal will dilute earnings more than previously expected, largely because of a marketing fight brewing in the secondhand fashion space.
Here’s the issue. A competitor called Vinted has been pushing hard into the U.S. market with an aggressive ad campaign.
In April, Vinted’s U.S. ad impressions reached about 127% of Depop’s own numbers, and that spending helped Vinted grow its U.S. daily active users to roughly 20% of Depop’s user base.
That’s a real threat, and Depop has responded by significantly ramping up its own marketing spend, with July spending estimated at three times Vinted’s already elevated level.
Wells Fargo still thinks buying Depop was the right move strategically. eBay had struggled to compete against Vinted using its own core brand in markets like the U.K. and Germany.
Depop offers something different: a younger user base, lower average selling prices, and a discovery-focused shopping experience that Wells Fargo believes gives eBay a stronger way to fight back.
But strategy and near-term earnings are two different things.
Wells Fargo expects eBay’s Q3 and full-year 2026 earnings guidance to come in 9% and 6% below consensus because of the dilution from Depop.
On the flip side, the firm expects eBay to raise its gross merchandise value outlook, meaning the actual sales volume moving through the platform should still look healthy even as profits take a hit from marketing spend.
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What the Market Is Telling Us About eBay Stock
The 6% drop in eBay stock shows investors are more focused right now on near-term profit pressure than on the long-term logic of the Depop deal.
Wall Street doesn’t seem to be arguing that buying Depop was a mistake. The concern is that defending it against Vinted is going to cost real money, and that money comes straight out of earnings in the short run.
For anyone watching eBay stock, the key tension here is pretty simple.
eBay is fighting for market share in secondhand fashion, a category it clearly wants to own.
But winning that fight means spending more, and Wells Fargo’s price target cut to $92 reflects the belief that near-term earnings will feel that pressure before any competitive advantage fully pays off.
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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 stocks mentioned. Thank you for reading, and happy investing!
