eBay: The Undervalued Hidden Gem Leveraging Strategic Partnerships for Growth

In a market increasingly dominated by buzz around AI and tech innovation, eBay (NASDAQ: EBAY) has quietly positioned itself as a hidden gem with underappreciated growth potential. A strategic partnership with Facebook Marketplace, Jim Cramer's surprise endorsement, and a valuation that lags behind its peers all point to a stock primed for upside. While investors chase the next AI breakthrough, eBay's tangible partnerships and steady execution suggest it's time to revisit this overlooked e-commerce leader.

The Facebook Marketplace Partnership: A Growth Catalyst Ignored

In early 2025, eBay announced a partnership with Meta Platforms (NASDAQ: META) to feature select listings on Facebook Marketplace in the U.S., Germany, and France. The move instantly gave eBay sellers access to 2.8 billion monthly active users, with listings appearing automatically based on quality and trending categories. For eBay, this is a game-changer: its listings now sit alongside 474 million Marketplace users, boosting visibility without requiring sellers to lift a finger.

The immediate impact was undeniable. On January 8, 2025, eBay's stock surged 12% to $71.50—its highest level since late 2021—after the announcement. While the stock has since retreated, the partnership's long-term potential remains underappreciated. By Q2 2025, eBay projected flat to 2% revenue growth ($2.59B–$2.66B) and similar gains in gross merchandise volume (GMV). These figures, though modest, reflect a stabilization after years of stagnation.

Why It Matters: Facebook Marketplace's dominance in social commerce (51% market share) gives eBay a direct pipeline to buyers who might otherwise turn to Amazon or Walmart. For Meta, the deal mitigates antitrust risks while expanding its marketplace offerings. Both companies win—eBay gains traffic, Meta avoids fines, and sellers benefit from broader exposure.

Jim Cramer's “Real Shocker” Endorsement

Legendary investor Jim Cramer recently called eBay a “real shocker” on Squawk on the Street, praising its resurgence after years of underperformance. Cramer highlighted how the Facebook partnership has reinvigorated eBay's growth trajectory, noting its role in making second-hand shopping “mainstream.” He criticized eBay's conservative financial forecasts as overly pessimistic, comparing the stock's undervalued status to that of Sweetgreen (NASDAQ: SRWR) during its recovery phase.

While Cramer ranks eBay 11th on his watchlist—behind hotter AI stocks—he acknowledges its “no-brainer” appeal: “This isn't just a comeback story; it's a strategic realignment.”

Valuation: A Discounted Gem in an Overvalued Market

At a forward P/E of 18, eBay trades below the S&P 500 average (24) and its e-commerce peers like Amazon (NASDAQ: AMZN, P/E 37) and Shopify (NYSE: SHOP, P/E 28). This discount persists despite eBay's $10.28B in 2024 revenue and its AI-driven initiatives, such as tools to streamline listings and enhance ad revenue (up 13% year-over-year in Q1 2025).

In contrast, many AI stocks—while exciting—sport sky-high valuations with little proven revenue. Take NVIDIA (NASDAQ: NVDA), for instance, which trades at a P/E of 63 despite its critical role in AI infrastructure. eBay's tangible partnerships and $68.04 analyst price target (a 14% downside from recent prices) suggest it's a safer, undervalued play compared to overhyped AI stocks.

Risks and Why the Upside Outweighs Them

Critics point to eBay's stagnant GMV (down 2% in late 2024) and reliance on mature markets. Competitors like Walmart and Amazon continue to erode its share. However, the Facebook partnership addresses these headwinds:

• Global Expansion: The partnership is a pilot today but could expand to more regions, unlocking new markets.
• Seller-Friendly Model: No additional fees for sellers, ensuring broad adoption.
• Data Synergy: Meta gains insights into buyer behavior, while eBay benefits from targeted ads and visibility fees.

Investment Thesis: A Value Play with Catalysts

Buy Now or Wait?
- Buy: eBay's stock trades at a discount to its peers and growth prospects. Historically, when eBay has exceeded earnings estimates, a buy-and-hold strategy for 30 days has delivered an average return of 50.8%, suggesting strong upside potential. The Facebook partnership's rollout in 2025 and beyond could drive a revaluation. Investors should note, however, that such strategies carry risks, including a historical maximum drawdown of -43% and volatility of 19.9%.

- Hold: If you prefer short-term gains, AI stocks may offer higher volatility. But for a stable, undervalued name with execution risk priced in, eBay is compelling.

Target Price: Analysts see $68.04 in 12 months, but if the partnership accelerates growth, $75–$80 is achievable.

Final Take

eBay isn't a flashy AI disruptor, but its strategic moves—paired with a rational valuation and Cramer's seal of approval—make it a standout value play. In a market obsessed with the next big thing, eBay's steady growth and underappreciated partnerships offer a safer, under-the-radar opportunity. Investors chasing AI hype might want to look back and see the real shocker: eBay is undervalued and primed to surprise.

Bottom Line: eBay is a buy for those seeking a stable, undervalued growth story in a volatile market. The Facebook partnership is just the start.