TenQ

The eBay story

eBay runs a marketplace funded by transaction fees and advertising, with the question of whether its focus on enthusiasts and Depop's fashion audience can turn faster commerce growth into sustained cash growth.

Written from eBay's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $107.32share price, last close
  • $47.8Bmarket value
  • 19/36TenQ Score checks passed
  • 11.3%growth a year the price assumes

The story in brief

  • Marketplace growth accelerated. In the quarter to June 2026, revenue reached $3.1 billion and gross merchandise volume reached $22.4 billion, both up 15% from a year earlier.
  • Depop expands fashion. eBay completed its $1.4 billion cash acquisition of Depop on July 30, 2026, extending its resale business to a Gen Z and Millennial audience.
  • Cash returns exceeded generation. In the quarter to June 2026, eBay returned $448 million through share repurchases and dividends against $326 million of free cash flow from continuing operations.

What drives the business

  • eBay's strategy centers on enthusiasts in vehicle parts, collectibles, refurbished items and fashion, supported by a marketplace that enabled nearly $80 billion of gross merchandise volume in 2025.
  • Transaction fees, advertising and shipping generate revenue, while services such as Authenticity Guarantee and the PSA trading card grading partnership support trust and repeat activity.
  • The Depop acquisition extends that strategy into fashion resale, adding a younger audience to a marketplace with 135 million active purchasers and 2.5 billion live listings at the end of 2025.
  • First-party advertising revenue grew 25% to $570 million in the quarter to June 2026, while total advertising revenue reached $596 million.
  • eBay Live added another commerce format, with gross merchandise volume growing approximately eight times from a year earlier across seven markets in the quarter to June 2026.

What the price assumes

At $107.32, the reverse DCF implies free cash flow after stock-based pay grows 11.3% a year for ten years, using a 10.2% discount rate.

That compares with delivered growth of -11.2% a year over the last 10 years and the TenQ check's bar of -3.6%, which moves the historical record halfway toward 4%.

Revenue growth accelerated to 14.7% over the last twelve months from a three-year annual pace of 4.3%, but the price assumes a reversal of the longer cash-flow record, not merely continued revenue expansion.

Value EBAY on your own assumptions

What could change the story

  • Higher payment processing volume, promoted offsite advertising costs, and data center and site operations costs increased the cost of revenue in the quarter to June 2026.
  • Transaction losses also increased because of unfavorable fraud and recovery rates alongside higher transaction volume, making trust programs a cost exposure as well as a competitive feature.
  • Total debt of $6.7 billion and a near-term liquidity ratio of 1.02 against the TenQ check's 1.50 bar leave less financial flexibility for acquisitions and capital returns.
  • Shareholder distributions represented 107.5% of free cash flow over the last twelve months, failing the check for keeping distributions within cash generation.
  • GameStop's unsolicited acquisition proposal, received in May 2026, was non-binding, and TD Securities' confidence in raising up to $20.0 billion of debt depended on conditions including credit ratings, due diligence and definitive documentation.

What to watch next

  • For the third quarter of 2026, guidance including Depop calls for revenue between $3.07 billion and $3.12 billion, with currency-neutral growth of 8% to 10%, and gross merchandise volume between $22.0 billion and $22.4 billion, with currency-neutral growth of 10% to 12%.
  • Management expects diluted GAAP earnings per share between $0.94 and $0.99 and diluted non-GAAP earnings per share between $1.36 and $1.42.
  • Depop's contribution, advertising growth, transaction losses and free cash flow relative to distributions will show whether the broader marketplace is translating growth into cash.

Sources

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