eBay Nears Big Breakout: Time to Buy the Under-the-Radar Winner?

Key Points

• Up nearly 12% year-to-date, eBay is outperforming the market, and is just 3% below a key breakout level.
• Strong Q1 earnings, growing free cash flow, AI innovation, and strength in key categories like fashion and collectibles highlight solid execution amid a challenging economic backdrop.
• Despite mixed analyst sentiment, institutional investors are showing confidence with $1.4 billion in net inflows over the past year, supporting eBay’s long-term potential.

Internet retail giant eBay Inc. NASDAQ: EBAY has quietly delivered strong returns in 2025, even as many peers and broader indices have stumbled.

While the stock is up close to 12% year-to-date (YTD), easily outperforming its sector and the broader market, it remains under the radar for many investors.

Notably, it’s trading just 3% below a multi-month breakout level and its 52-week high. A breakout from here could potentially open the door to a test of its all-time high.

Is it time to gain exposure to eBay as it inches closer to this critical resistance level? Let’s take a closer look at what’s driving the move.

Strong Q1 Earnings Despite Economic Headwinds

eBay reported its first-quarter 2025 results on April 30, coming in ahead of expectations despite a challenging macroeconomic backdrop.

Revenue reached $2.58 billion, up 2% year-over-year, while non-GAAP earnings per share rose 10% to $1.38, beating consensus estimates. Gross Merchandise Volume (GMV) climbed nearly 2% to $18.8 billion, marking the fourth consecutive quarter of GMV growth.

The company also continued to return capital to shareholders, with $893 million in Q1 buybacks and dividends. Free cash flow surged 36% to $644 million, giving eBay continued flexibility to reinvest and reward shareholders.

Category-specific strength was a key highlight, especially in collectibles and fashion, which each saw over 6% GMV growth. On the innovation front, eBay rolled out several AI-powered tools to streamline the buying and selling experience, including its new “magical listing” tool and a fashion discovery platform.

Advertising revenue rose 13% to $442 million, and its expanded partnership with Klarna introduced “Buy Now, Pay Later” options, improving purchase flexibility for users.

Despite global tariff concerns, eBay noted that just 5% of its GMV is exposed to China-U.S. trade, and its global shipping programs and diverse seller base help mitigate regional risks.

Looking ahead, eBay guided for low single-digit GMV growth and high single-digit earnings per share growth for the full year, while committing to more than $2 billion in share repurchases in 2025. The company’s emphasis on enthusiast buyers, re-commerce, and operational efficiency is helping it carve out a defensible niche amid rising competition.

Compelling Valuation and Relative Strength

Alongside strong fundamentals and a 1.68% dividend yield, eBay’s valuation adds to its appeal. Despite the YTD rally, the stock trades at a forward P/E of just under 12, well within value territory, especially in the context of its earnings outlook and robust cash flow. eBay’s price-to-free-cash-flow ratio stands at 14.98.

Technically, momentum remains on eBay’s side. The stock consolidates above all major moving averages and shows clear relative strength versus the broader market. With just over 3% to go before testing its 52-week high, a breakout could draw further investor attention.

Sentiment Is Mixed, But Institutions Are Buying

Despite solid fundamentals and strong price action, analyst sentiment remains somewhat cautious.

While the latest earnings report prompted several price target upgrades, the consensus rating remains a Hold, with a consensus price target implying roughly 2.5% downside from recent levels.

That said, institutional investors appear more bullish. Institutional ownership currently sits at 87% and has been trending higher.

Over the past year, institutional inflows totaled $3.9 billion versus $2.5 billion in outflows, a net positive of $1.4 billion, indicating that “smart money” continues to show confidence in the company’s long-term trajectory.

eBay: Undervalued, Steady, and Ready to Run 

eBay may not have the flash of high-growth tech names, but its steady earnings, shareholder returns, AI innovation, and compelling valuation make it a stock worth watching. The stock could be surprised by the upside as it approaches a major technical breakout and continues to execute its strategic goals.

Investors looking for a value-oriented tech play with upside potential may want to consider this stock, especially if it breaks through its current resistance level.