Bernstein SocGen Group Reiterates Market Perform Rating on eBay (EBAY)

Bernstein SocGen Group analyst Nikhil Devnani reiterated a Market Perform rating and $115.00 price target on eBay (NASDAQ: EBAY).

The analyst comments "Our initial reaction to the Vinted (private) bear case on EBAY was to push back. You have to respect what Vinted has done in Europe (taking share from EBAY and others in the C2C space), but we have felt that the US market could play out differently with several incumbents and EBAY’s latest acquisition of Depop. We still believe that to be the case. That said, as Vinted invests behind the US market, it matters for Depop given similar audiences. Vinted is too small in the US to move the needle on share today. But it has caught our attention that paid channels to Depop.com have grown substantially in recent weeks, raising the question of the asset’s burn rate as EBAY closes the deal and investors look ahead to 2027 EBIT growth. Vinted is going after the US. US App users appear to be up 4x since January (off a small base, now ~25% of Depop MAU and ~6% of eBay MAU in the US). Share seems to be LSD. Why care? Vinted has gained considerable ground in Europe, notably the UK. Last year, it facilitated $12.2B globally in GMV vs. eBay at $80B (~$20B in C2C) and Depop at $1.1B. How does eBay respond? Market share risk is debatable and a longer-term consideration, given double-digit growth in EBAY C2C GMV and a more fragmented US market. EBAY’s core business is firing on all cylinders and it has the capital to pressure Vinted early, which makes sense strategically. However, near-term, there is a question of what this does to the EBIT growth algorithm. We don’t think management lowers fees on eBay.com in the US (like it did in the UK, Germany, and Australia), but it could be more competitive via Depop — to that point, marketing spend already appeared to grow prior to the transaction closing last week and the deal was upped by $0.2B. Every incremental ~$100M increase to the burn rate of Depop would create -3% Y/Y EBIT headwind (annually) before offsets."

For an analyst ratings summary and ratings history on eBay click here. For more ratings news on eBay click here.

Shares of eBay closed at $114.01 yesterday.

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