EBay Earnings: Take Rate Pressures and Soft Guidance Drive Selloff; Shares Remain Slightly Expensive

While narrow-moat eBay reported solid quarterly results, its weaker than expected guidance gave the market jitters. The combination of its UK fee reductions, depreciation accounting changes, and mergers and acquisitions integration costs are together set to add a 100-basis-point headwind to 2025 profitability, while forecasts for low-single-digit gross merchandise volume growth for the year suggest roughly 50 basis points lower sales growth than the 3.2% we'd initially contemplated. As we digest results, we plan to lower our $59 fair value estimate by a mid-single-digit percentage. Shares continue to look expensive, even after an 8% to 9% selloff in Feb. 26 after-market trading.