eBay stock surges on strong Q2 earnings and upbeat Q3 forecast

eBay's stock surged nearly 10% in post-market trading after the e-commerce giant reported Q2 earnings that beat expectations and provided a better-than-expected forecast for the current quarter. The company's Q3 guidance also exceeded expectations, driving up its shares.

eBay Inc. (EBAY) reported strong second-quarter (Q2) 2025 earnings, with earnings per share (EPS) of $1.37, surpassing the forecast of $1.29. Revenue reached $2.73 billion, exceeding expectations of $2.64 billion. The company’s impressive 71.9% gross profit margin underscores its operational efficiency [1].

Despite the positive results, eBay’s stock dipped 1.2% in aftermarket trading, closing at $78.5. The company returned $760 million to shareholders through repurchases and dividends. Expansion in AI-driven initiatives and strategic partnerships bolstered growth. Despite strong financials, the stock fell 1.2% post-earnings [1].

Key Takeaways
- eBay’s EPS and revenue both exceeded market expectations.
- The company returned $760 million to shareholders.
- Expansion in AI-driven initiatives and strategic partnerships bolstered growth.

Market Reaction
Despite the earnings beat, eBay’s stock fell 1.2% in aftermarket trading, closing at $78.5. According to InvestingPro’s Fair Value analysis, eBay currently appears fairly valued. The stock trades at a P/E ratio of 18.3x and has demonstrated strong momentum with a 42.4% return over the past year. This decline may reflect investor caution or broader market trends, as the stock remains below its 52-week high of $83.53 [1].

Outlook & Guidance
For Q3 2025, eBay projects revenue between $2.69 billion and $2.74 billion, with gross merchandise volume (GMV) guidance ranging from $19.2 billion to $19.6 billion. The company expects full-year GMV to reach the high end or slightly above low single-digit growth. Seven analysts have recently revised their earnings estimates upward, reflecting growing confidence in eBay’s outlook [1].

Executive Commentary
CEO Jamie Iannoni stated, "We delivered another strong quarter in Q2 with all of our key financial metrics exceeding both consensus expectations and the high end of our respective guidance ranges." He emphasized the growth in focus categories and the potential for ads growth, highlighting eBay’s strategic initiatives and market positioning [1].

Risks and Challenges
International market challenges, particularly in Europe, could impact growth. Macroeconomic conditions and consumer spending trends may affect future performance. Competition in the e-commerce sector remains intense, requiring continuous innovation [1].

References:
[1] https://za.investing.com/news/transcripts/earnings-call-transcript-ebay-q2-2025-earnings-beat-expectations-93CH-3812405