Why eBay Stock Sank Today
Key Points
eBay posted solid sales growth in the third quarter.
That growth could slow in the coming quarters due to higher tariff-related costs.
- 10 stocks we like better than eBay ›
Shares of eBay (NASDAQ: EBAY) declined on Thursday after the online marketplace operator's profit forecast fell short of investors' expectations. As of 1:55 p.m. ET, eBay's stock price was down more than 14%.
Image source: Getty Images.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Solid sales and cash flow growth
eBay's third-quarter revenue rose by 9% year over year to $2.8 billion. The e-commerce company's gross merchandise volume (GMV) -- the total value of all merchandise sold on its marketplaces -- increased by 10% to $20.1 billion. eBay earns revenue from its GMV from the fees it charges sellers.
eBay is integrating artificial intelligence (AI) features into its platform to facilitate transactions between buyers and sellers. The company recently unveiled a new AI-powered messaging tool and other tech upgrades to help sellers grow their sales and profits.
"We're transforming the eBay experience through AI built on 30 years of unique insights, while enhancing trusted programs in shipping, live commerce, and circular fashion," CEO Jamie Iannone said in a press release.
Moreover, eBay's asset-light business model remains highly profitable. The marketplace provider produced $803 million in free cash flow from continuing operations during the third quarter. That enabled eBay to return $757 million to shareholders via dividends and stock buybacks.
Tariffs could slow eBay's growth
Investors, however, appeared to focus more on eBay's business outlook. Management guided for adjusted earnings per share of $1.31 to $1.36 in the fourth quarter. That was below analysts' estimates of $1.39.
During eBay's earnings call, CFO Peggy Alford said the suspension of the de minimis exemption for imports under $800 for tariffs in late August began to negatively impact transaction volumes in September.
Should you invest $1,000 in eBay right now?
Before you buy stock in eBay, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and eBay wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $593,442!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,127!*
Now, it’s worth noting Stock Advisor’s total average return is 1,071% — a market-crushing outperformance compared to 196% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2025
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends eBay. The Motley Fool has a disclosure policy.
Recommended Articles
