Stock Analysis & Valuation eBay Inc. (EBAY.SW)

• Previous Close: CHF39.53
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	4.50	-89
Graham Formula	31.00	-22

Strategic Investment Analysis

Company Overview

eBay Inc. (EBAY.SW) is a global e-commerce leader operating a dynamic online marketplace that connects buyers and sellers across the United States and internationally. Founded in 1995 and headquartered in San Jose, California, eBay's platform includes its flagship website, eBay.com, and a suite of mobile apps, facilitating transactions for a diverse range of products through various online and offline channels. The company serves a broad ecosystem, including retailers, distributors, liquidators, and individual sellers, making it a key player in the Specialty Retail sector within the Consumer Cyclical industry. With a market capitalization of approximately $23.3 billion, eBay continues to innovate in digital commerce, leveraging mobile technology and secure payment solutions to enhance user experience. Its robust revenue of $10.28 billion in the latest fiscal year underscores its resilience in a competitive e-commerce landscape dominated by giants like Amazon and Alibaba.

Investment Summary

eBay presents a mixed investment case with both strengths and risks. On the positive side, the company maintains a strong brand presence, a global user base, and consistent profitability, with a net income of $1.98 billion and diluted EPS of $3.94 in the latest fiscal year. Its operating cash flow of $2.41 billion provides financial flexibility, and a dividend yield of approximately 1.6% (based on a $0.92 annual dividend) offers income appeal. However, eBay faces intense competition from larger e-commerce players, as reflected in its beta of 1.32, indicating higher volatility than the broader market. The company's growth has plateaued compared to faster-growing rivals, and its debt load of $7.86 billion could constrain strategic initiatives. Investors should weigh eBay's stable cash flows against its challenges in regaining significant market share in an increasingly consolidated industry.

Competitive Analysis

eBay operates in a highly competitive e-commerce landscape dominated by Amazon and other global platforms. Its primary competitive advantage lies in its auction-style marketplace model, which differentiates it from fixed-price competitors and attracts niche buyers and collectors. The company has also invested in user experience improvements, including mobile optimization and secure payment systems like Managed Payments, to enhance trust and convenience. However, eBay struggles to compete with Amazon's vast logistics network, Prime membership benefits, and superior scale in third-party seller services. Unlike Amazon or Alibaba, eBay does not operate a significant first-party retail business or cloud computing segment, limiting its revenue diversification. Additionally, the rise of specialized vertical marketplaces (e.g., Etsy for handmade goods) has eroded eBay's share in certain categories. While eBay maintains a loyal user base and strong brand recognition, its growth prospects are constrained by its inability to match the technological infrastructure and delivery speed of larger rivals. The company's focus on cost control and shareholder returns (via dividends and buybacks) suggests a more defensive strategy rather than aggressive expansion.

Major Competitors

• Amazon.com Inc. (AMZN): Amazon is the undisputed leader in global e-commerce, with a market cap exceeding $1 trillion. Its strengths include a vast logistics network, Prime membership loyalty program, and diversified revenue streams (e.g., AWS, advertising). However, its marketplace fees are higher than eBay's, and it lacks eBay's auction-style sales model, which appeals to certain niche buyers. Amazon's scale and resources make it a formidable competitor, but eBay retains an edge in secondary markets and collectibles.
• Alibaba Group Holding Ltd (BABA): Alibaba dominates the Chinese e-commerce market through platforms like Taobao and Tmall. Its strengths include deep penetration in Asia, strong cross-border trade capabilities, and a growing cloud business. However, Alibaba faces regulatory risks in China and has limited traction in Western markets compared to eBay. While Alibaba's scale is larger, eBay's established presence in the US and Europe gives it regional advantages.
• Etsy Inc. (ETSY): Etsy specializes in handmade, vintage, and craft items, carving out a niche distinct from eBay's broader marketplace. Its strengths include a highly engaged community of artisans and buyers, with strong brand loyalty. However, Etsy's product range is narrower, and it lacks eBay's global reach in general merchandise. eBay competes indirectly with Etsy in certain categories but does not focus as intensely on the handmade segment.
• MercadoLibre Inc. (MELI): MercadoLibre is the leading e-commerce platform in Latin America, with strengths in fintech (Mercado Pago) and logistics. It has outperformed eBay in emerging markets but lacks eBay's historical presence in North America and Europe. While MercadoLibre is growing rapidly, eBay's mature markets provide more stable cash flows. eBay does not compete directly with MercadoLibre's regional dominance but faces pressure in cross-border trade.
• ContextLogic Inc. (Wish) (WISH): Wish targets budget-conscious shoppers with discounted goods, primarily from Chinese sellers. Its strength lies in low prices, but it struggles with product quality and delivery times. eBay competes in the value segment but offers a more trusted platform with buyer protections. Wish's declining user base highlights the challenges of competing solely on price, an area where eBay has a more balanced approach.