eBay’s Buy Rating Maintained at Benchmark

Benchmark analysts reiterated their Buy rating on eBay (NASDAQ:EBAY) stock with a price target of $58, noting that despite a challenging end to 2023, the company has consistently exceeded expectations in 2024.

The company's progress was highlighted by the successful sale of the majority of its Adevinta stake to Permira and Blackstone for initial gross proceeds of $2.4 billion, potentially reaching $3.5 billion. The main question remains whether eBay can maintain its growth momentum and achieve a more competitive growth rate.

In discussions with eBay's team, the analysts found that there are multiple growth avenues available now that significant tech investments are largely completed. These include improved performance in non-focus categories and opportunities for broader horizontal expansion. The analysts believe that growth potential extends beyond gross merchandise volume (GMV), with underlying take rates likely to increase and drive further GMV growth if eBay chooses to capitalize on this.

While operational expenses may fluctuate in the short term, the analysts see several areas for potential leverage, such as ongoing payments optimization and further internal expense consolidation, which could stabilize operating income margins. The analysts anticipate that estimates will start to rise but believe there is still significant potential for eBay to outperform, even without factoring in any recovery in the German or UK markets.