How Strong is eBay’s Valuation After 46% Rally and Recommerce Growth?

So you are wondering what to do with eBay stock right now. Maybe you have held it since the start of the year and are feeling pretty good. That year-to-date return of 46.4% is hard to ignore. Even over the last twelve months, eBay has soared 44.7%, outpacing much of the broader market. Stretch that out to three or even five years, and you are looking at gains of 162.7% and 92.4%, respectively. That is some serious long-term growth that has made holding onto eBay quite rewarding, even if the last 30 days saw a modest dip of -2.7% and the last week was flat.

Much of this upward momentum can be traced back to shifts in how investors are viewing the entire online commerce sector. Market developments, such as increasing consumer confidence in digital marketplaces and a steady rise in cross-border trading volumes, have helped reduce risk perceptions and drawn fresh interest to established platforms like eBay. Longer-term performance suggests eBay has found ways to remain relevant, if not ahead of the pack, even when competition is fierce and trends keep evolving.

But here is where it gets really interesting. Looking purely at numbers, eBay’s valuation score is 4 out of 6. That means by most major standards, eBay appears undervalued right now. Of course, numbers only tell part of the story, and you are probably curious about which valuation techniques are most telling, and whether there is a smarter way to judge a stock’s worth. Up next, let’s break down the key valuation approaches and hint at a better way to evaluate eBay’s true value.

eBay delivered 44.7% returns over the last year. See how this stacks up to the rest of the Multiline Retail industry.

Approach 1: eBay Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company is worth today by forecasting its future cash flows and then discounting those amounts back to their present value. This method helps investors determine whether a stock is trading at a price above or below its true worth based on long-term business trends rather than short-term noise.

For eBay, the current Free Cash Flow (FCF) stands at $1.42 Billion. Analyst forecasts suggest steady growth over the next several years, with FCF projected to reach $3.66 Billion by the end of 2029. These forward-looking estimates are based on actual analyst projections for five years. After this period, Simply Wall St applies a consistent growth model for subsequent years through 2035. The underlying assumption is that eBay will continue increasing its cash flow at moderate rates while maintaining a strong foothold in digital commerce.

The bottom line from this DCF analysis is an intrinsic value of $140.96 per share. Compared to eBay’s actual share price, this calculation suggests the stock is trading at a 35.3% discount. In practical terms, the market currently undervalues eBay according to its discounted cash flow potential.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for eBay.

Our Discounted Cash Flow (DCF) analysis suggests eBay is undervalued by 35.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: eBay Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like eBay, as it measures how much investors are willing to pay for each dollar of earnings. This makes it especially valuable for well-established firms that generate consistent profits, offering a direct look at market sentiment and growth expectations.

What counts as a “fair” PE ratio often depends on factors such as the company’s expected earnings growth, risk profile, and how it compares to its sector. Companies with higher growth prospects or lower perceived risk typically command a higher PE ratio, while those facing uncertainty or slower growth see lower ratios. For context, eBay currently trades at a PE ratio of 19.0x. This is just under the Multiline Retail industry average of 21.9x, and significantly below the peer group average of 67.6x.

Simply Wall St’s proprietary "Fair Ratio" provides a more precise benchmark for valuation. Unlike basic industry or peer comparisons, the Fair Ratio is tailored to each business, taking into account unique characteristics such as eBay’s earnings growth, profit margins, market cap, and risk factors. For eBay, the Fair Ratio is set at 18.6x based on these fundamentals. With eBay’s current PE of 19.0x sitting almost exactly in line with its Fair Ratio, the stock appears valued ABOUT RIGHT by this approach.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your eBay Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is an investor’s story or thesis about a company's future, combining their view of eBay’s business drivers, financial forecasts, and fair value all in one place. Instead of just crunching numbers, Narratives invite you to connect the story you believe about eBay (for example, optimism about AI-powered tools and revenue growth in high-value categories, or concern about narrowing focus and tough competition) with specific estimates for future revenue, earnings, and margins.

In the Simply Wall St Community, millions of investors use Narratives as a simple, interactive way to see how their convictions play out financially. They can compare their calculated Fair Value to eBay’s share price to decide when it might be time to buy or sell. These Narratives dynamically update with every earnings report or piece of news, so your view can evolve as fresh information arrives.

For example, some eBay investors see major upside, setting a Narrative with a bullish price target of $102.00 based on robust recommerce growth and AI-driven margin expansion. Others take a cautious stance with a $60.00 target due to concerns about revenue consistency and competition. This makes it easy to see how your own perspective stacks up against the market and empowers you to invest with greater clarity and confidence.

Do you think there's more to the story for eBay? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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