Key Stats for eBay Stock
- 1-week Price Change for eBay stock: -17%
- $EBAY Share Price as of Oct. 31: $81
- 52-Week High: $101
- $EBAY Stock Price Target: $95
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What Happened?
eBay (EBAY) stock dropped over 14% on Thursday despite reporting solid third-quarter results that beat expectations.
The selloff occurred after management issued Q4 earnings guidance that fell short of Wall Street’s expectations, dragging EBAY stock lower by almost 3% on Friday as well.
The e-commerce marketplace posted revenue of $2.82 billion, up 9% year-over-year and ahead of analyst estimates of $2.73 billion.
Gross merchandise volume grew 10% to $20.1 billion, driven by strong performance in focus categories like collectibles, auto parts, and fashion. Earnings per share came in at $1.36, beating the $1.33 consensus estimate and marking 14% growth from the prior year.
- Focus category GMV accelerated to over 15% growth, outpacing the rest of the marketplace by 11 percentage points.
- Trading cards continued their hot streak with triple-digit growth in Pokémon cards for the third straight quarter.
- The motor parts and accessories category contributed more than 1 point to overall marketplace growth.
eBay is investing heavily in AI to improve the buyer and seller experience. The company rolled out AI-powered messaging tools that help sellers respond to buyer inquiries more quickly.
Management also unveiled an agentic commerce platform that will allow buyers to shop using natural language and connect with third-party AI agents from companies like OpenAI.
eBay generated $803 million in free cash flow during the quarter and returned $757 million to shareholders through dividend payments and share repurchases.
eBay’s asset-light marketplace model continues to produce strong profitability with operating margins of 27.1%.
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What the Market Is Telling Us About eBay Stock
Despite the strong quarterly results, eBay stock tanked because of disappointing forward guidance. Management forecast fourth-quarter earnings per share between $1.31 and $1.36, below analyst expectations of $1.39.
Revenue guidance of $2.83 billion to $2.89 billion was roughly in line with estimates, but the operating margin is expected to decline year-over-year.
The weaker outlook primarily stems from changes in U.S. trade policy. In late August, the government eliminated the de minimis exemption, which allowed imports valued under $800 to enter the country duty-free.
CFO Peggy Alford explained that this policy shift began negatively impacting transaction volumes in September, particularly for cross-border sellers in Japan and Canada.
eBay expects the tariff impact to be a full-quarter headwind in Q4 compared to just one month in Q3. The company estimates this could shave approximately one percentage point off GMV growth for the full year 2026.
Management is responding by accelerating its cross-border shipping solutions, including the rollout of eBay International Shipping to Canadian sellers and the expansion of SpeedPAK to German sellers.
Looking ahead to 2026, management provided preliminary commentary suggesting continued positive growth in GMV and revenue, but flagged several headwinds.
These include lapping robust growth in trading cards, lower marketing efficiency, and the ongoing impact of tariffs.
The company expects the gap between GMV growth and revenue growth to narrow due to pressure on cross-border monetization and a higher mix of lower-margin businesses, such as vehicles and eBay Live.
eBay stock likely fell because investors are recalibrating expectations for 2026 growth. While the company has made impressive strides with focus categories and AI integration, the macroeconomic and trade policy environment is creating near-term uncertainty.
Management’s comments about normalizing growth rates and margin pressure suggest the easy wins may be behind them.
That said, eBay continues to execute its strategy effectively. It is gaining market share in key categories, enhancing seller tools with AI, and expanding into new growth areas, such as live commerce and collectible vehicles.
Free cash flow generation remains robust, supporting significant capital returns to shareholders. For long-term investors, today’s selloff may represent an opportunity to buy eBay stock at a more attractive valuation.
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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!
