eBay vs. Macy's: Which Consumer Stock Is a Better Buy in 2026?

As the retail landscape shifts toward digital marketplaces and reimagined department stores, choosing between eBay (NASDAQ:EBAY) and Macy's (NYSE:M) depends on whether you value high-margin technology or a classic turnaround play.

eBay operates a global online platform connecting buyers and sellers, while Macy's anchors its business in physical storefronts and luxury brands. They are sometimes compared because both companies are navigating a rapidly evolving consumer environment where scale and digital integration determine long-term viability in a competitive market.

The case for eBay

eBay operates a global online marketplace that bypasses the need for owned inventory, focusing instead on connecting millions of buyers and sellers. The company specializes in enthusiast categories such as motor vehicles, collectibles, and refurbished items, often utilizing partners for authentication services. As of June 2026, GameStop (NYSE:GME) has submitted a non-binding acquisition proposal at $125 per share, introducing a new layer of uncertainty regarding the company's future ownership.

eBay competes within the broader universe of retail stocks by focusing on these niche categories to drive engagement. In fiscal 2025, revenue reached nearly $11.1 billion, good for roughly 7.9% year-over-year growth. eBay generated net income of roughly $2 billion, resulting in a net margin of close to 18.3%.

As of its December 2025 balance sheet, the company maintained a debt-to-equity ratio of 1.6x. That means eBay uses $1.60 of debt for every dollar of equity owned by shareholders to fund its operations. The current ratio, which measures the ability to pay short-term debts with assets that can be converted to cash quickly, stood at 1.1x, while free cash flow reached nearly $1.7 billion for the year.

The case for Macy's

Macy's operates an omnichannel retail business through its primary namesake brand, along with the luxury-focused Bloomingdale's and beauty-centric Bluemercury. A significant portion of its financial structure is supported by a long-term commercial agreement with Citigroup (NYSE:C), which manages its credit card portfolio and involves profit-sharing on receivables. The company currently manages hundreds of locations across the United States while expanding its digital presence to reach a broader customer base.

Financial results for fiscal 2025 show that revenue was approximately $22.6 billion, a slight decline of roughly 1.7% from the prior year. Despite the dip in sales, the company generated net income of close to $642 million. This led to net margin of approximately 2.8%, reflecting the higher costs associated with maintaining a massive physical store footprint and inventory.

According to its January 2026 balance sheet, Macy's carries a debt-to-equity ratio of nearly 1.1x, suggesting a more conservative use of borrowed funds relative to its equity. Its current ratio of 1.5x means the company has $1.50 in current assets for every dollar of short-term liabilities. Free cash flow for the year was approximately $1.1 billion, providing the capital needed for its ongoing store reimagining strategy.

Risk profile comparison

eBay faces significant trial risk following the collapse of settlement negotiations in a cyberstalking lawsuit as of June 2026. The platform also contends with aggressive rivalry from AI-powered search tools and chatbots developed by companies like Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN). Furthermore, changes to global trade policies, including the potential removal of tax exemptions for small cross-border packages, could increase compliance burdens and transaction costs for its international sellers.

Macy's is currently focused on its “Bold New Chapter” strategy, but any failure to successfully modernize its supply chain or reimagine stores could hinder future profitability. The company is highly sensitive to shifts in consumer spending caused by inflation and interest rate volatility. Additionally, a heavy reliance on overseas manufacturing makes the business vulnerable to new tariffs and shipping disruptions resulting from global geopolitical tensions and trade disputes.

Valuation comparison

Macy's currently trades at a significantly lower earnings multiple and sales valuation than eBay, though the companies operate with vastly different profitability profiles.

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Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Macy's is a definite "no" for me. It feels like a special situation, which is outside my circle of competence. The department store retailer is a turnaround story, and those have a binary outcome: things turn around, or they don't. Put more bluntly, the company will figure things out and the stock will go up, or it won't, and it's a zero.

eBay is slightly more complicated. Whatever's happening with GameStop is sort of difficult to assess because GameStop hasn't been a rational stock (or company) for years now; launching an acquisition bid post-toilet does not especially inspire confidence, but opinions may vary here. eBay, at the very least, does not seem particularly keen, calling the offer "neither credible nor attractive."

Setting that aside, eBay's legal issues do seem concerning. What the plaintiffs allege is horrifying, and though they surely will not get as much in damages as they're requesting, it's a question mark I wouldn't like for a stock I owned.

It's a coward's way out, but truthfully, I wouldn't want to own either of these stocks.

Citigroup is an advertising partner of Motley Fool Money. Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and eBay. The Motley Fool has a disclosure policy.