eBay Nears Big Breakout: Time to Buy the Under-the-Radar Winner?

Core Insights - eBay has shown strong performance in 2025, with a year-to-date stock increase of nearly 12%, outperforming its sector and broader market [1][3] - The stock is currently trading just 3% below a multi-month breakout level, indicating potential for further gains [1][10] Financial Performance - eBay reported Q1 2025 revenue of $2.58 billion, a 2% year-over-year increase, and non-GAAP earnings per share of $1.38, up 10% [3] - Gross Merchandise Volume (GMV) reached $18.8 billion, marking the fourth consecutive quarter of growth [3] - Free cash flow surged 36% to $644 million, providing flexibility for reinvestment and shareholder rewards [5] Dividend and Shareholder Returns - eBay has a dividend yield of 1.66% with an annual dividend of $1.16 [4] - The company has a track record of 7 years of dividend increases, with a 3-year annualized growth rate of 14.47% [5] - In Q1, eBay returned $893 million to shareholders through buybacks and dividends [5] Growth Drivers - Category-specific strengths were noted in collectibles and fashion, each with over 6% GMV growth [6] - eBay introduced AI-powered tools to enhance user experience, including a "magical listing" tool and a fashion discovery platform [6] - Advertising revenue increased by 13% to $442 million, supported by a partnership with Klarna for "Buy Now, Pay Later" options [6] Market Position and Outlook - eBay anticipates low single-digit GMV growth and high single-digit earnings per share growth for the full year [8] - The company plans to execute over $2 billion in share repurchases in 2025 [8] - Institutional ownership is high at 87%, with a net positive inflow of $1.4 billion over the past year, indicating confidence in eBay's long-term prospects [12][13] Valuation and Technical Analysis - eBay's forward P/E ratio is just under 12, suggesting it is within value territory [9] - The stock is consolidating above major moving averages, showing relative strength against the broader market [10] - Analysts have a consensus price target of $67.42, indicating a potential downside of 3.24% from current levels [11]