Why eBay Stock Is Tumbling Despite A Q3 Earnings Beat

Core Viewpoint - eBay's stock experienced a significant decline despite reporting better-than-expected third-quarter results, attributed to a mixed outlook for the holiday quarter and high expectations set by previous stock performance [1][4]. Financial Performance - eBay reported adjusted earnings of $1.36 per share for the September-ended quarter, a 14% increase from the previous year, surpassing analyst expectations of $1.33 per share [2]. - Sales rose by 9% to $2.82 billion, exceeding analyst estimates of $2.73 billion [2]. Management Commentary - CEO Jamie Iannone highlighted the company's ongoing momentum and strategic execution, emphasizing the transformation of the eBay experience through AI and enhanced shipping and commerce programs [3]. - For the upcoming quarter, eBay projected sales of $2.86 billion, slightly above the $2.8 billion forecasted by analysts, but adjusted earnings guidance of $1.31 to $1.36 per share fell short of the $1.38 expected by analysts [3]. Market Reaction - Following the earnings report, eBay's stock fell over 14% to $85.31, marking its largest single-day drop since October 2008 [4]. - Analyst Mark Mahaney attributed the sell-off to lower-than-expected Q4 earnings per share and operating margin outlook, along with a soft growth outlook for 2026 [4]. Growth Outlook - eBay's CFO indicated expectations for a third consecutive year of positive gross merchandise volume (GMV) and revenue growth, but noted challenges in comparing to a strong previous year [4]. - The company projected a 5% growth in GMV for 2025, which disappointed some investors regarding the 2026 outlook [5]. Analyst Perspectives - Analyst Stephen Ju expressed concerns about eBay's 2026 GMV growth against tougher comparisons, reiterating a neutral stance on the stock [5]. - Some analysts suggested a broader view, indicating that eBay could benefit from innovations and agentic shopping trends, with Needham analyst Bernie McTernan maintaining a buy rating and raising the price target from $95 to $115 [8][9].