Why Is eBay (EBAY) Up 7.1% Since Last Earnings Report?

A month has gone by since the last earnings report for eBay (EBAY). Shares have added about 7.1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is eBay due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for eBay Inc. before we dive into how investors and analysts have reacted as of late.

eBay Q4 Earnings & Revenues Surpass Estimates, Both Increase Y/Y

eBay Inc. reported fourth-quarter 2025 non-GAAP earnings of $1.41 per share, which beat the Zacks Consensus Estimate by 3.68%. The bottom line increased 12.8% year over year.

Net revenues of $2.97 billion beat the Zacks Consensus Estimate by 2.98%. The figure increased 15% year over year on a reported basis and 13% on an FX-neutral basis.

eBay’s first-party advertising products generated revenues of $517 million in the reported quarter, up 19% on an as-reported basis and 17% on an FX-neutral basis.

Total advertising offerings yielded $544 million in revenues, representing 2.6% of gross merchandise volume (GMV).

EBAY’s active buyer base, which was pinned at 135 million at the end of the fourth quarter, increased 1% year over year and surpassed the consensus mark by 0.23%.

GMV Details for EBAY

EBAY’s total GMV of $21.24 billion in the reported quarter exhibited year-over-year growth of 10% on a reported basis and 8% on an FX-neutral basis. The reported GMV surpassed the Zacks Consensus Estimate of $20.79 billion.

The total GMV is categorized into two parts. U.S. GMV totalled $10.72 billion, accounting for 50.5% of the total GMV. The figure rose 18.6% year over year. International GMV was $10.52 billion, accounting for 49.5% of the total GMV. The figure increased 2.3% year over year.

EBAY’s Q4 Operating Details

Operating expenses of $1.52 billion grew 14.9% year over year. As a percentage of net revenues, the figure remains flat at 51.1% on a year-over-year basis.

The non-GAAP operating margin was 26.1% in the fourth quarter, contracting 90 basis points (bps) year over year.

EBAY’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, cash equivalents and short-term investments were $2.92 billion, down from $3.38 billion as of Sept. 30, 2025.

Long-term debt increased sequentially to $6 billion at the end of fourth-quarter 2025, compared with $5 billion in the prior quarter, indicating higher leverage on a quarter-over-quarter basis.

Cash flow from operating activities was $595 million in the fourth quarter, down from $934 million in the previous quarter, reflecting a sequential slowdown in cash generation.

Free cash flow decreased sequentially to $478 million in the fourth quarter compared with $803 million in the previous quarter.

The company repurchased $625 million worth of shares and paid out cash dividends of $131 million in the reported quarter. eBay had approximately $798 million remaining under its buyback authorization as of Dec. 31, 2025.

EBAY’s Q1 & 2026 Guidance

For the first quarter of 2026, eBay expects revenues in the range of $3.00 billion to $3.05 billion. On an FX-neutral basis, revenue growth is anticipated to be 13%-15%.

The non-GAAP operating margin for the first quarter of 2026 is expected to be between 28.3% and 29.2%.

GMV for the first quarter is likely to be in the range of $21.5-$21.9 billion. On an FX-neutral basis, GMV growth is anticipated to be 10%-12%.

Non-GAAP earnings per share are anticipated to be between $1.53 and $1.59.

EBAY has also provided its financial commentary for 2026. Revenue growth is expected to be in line with or slightly ahead of GMV growth on a year-over-year, FX-neutral basis. GMV growth is projected to be similar to 2025 levels on a year-over-year, FX-neutral basis.

Non-GAAP operating income is projected to increase 8%-10% year over year, while the company plans to return capital through roughly $2 billion in share repurchases in 2026.

Non-GAAP earnings per share growth is expected to be relatively in line with year-over-year non-GAAP operating income growth.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 5.05% due to these changes.

VGM Scores

At this time, eBay has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, eBay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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