EBAY INC (EBAY) stock intrinsic value fair value estimate & owner earnings analysis

eBay runs one of the original online marketplaces, connecting buyers and sellers across general merchandise, parts and accessories, and enthusiast categories like trading cards, collectibles and refurbished goods. It earns fees on transactions and, increasingly, from advertising — primarily Promoted Listings, where sellers pay to boost visibility of their items, a first-party ad product the company has been steadily scaling as a share of revenue. We based this valuation on owner earnings — cash generated from operations after subtracting stock-based compensation and the capital spending needed to maintain (not grow) the business. Because eBay went through two major divestitures in 2020 (StubHub) and 2021 (the Classifieds Group, sold to Adevinta), we anchored the valuation on the four full years since (2022–2025), which describe the company as it exists today rather than the earlier, larger conglomerate. Owner earnings per share over that period were fairly steady at roughly $2.8–$3.0, except for 2025, where a large one-time cash tax payment tied to selling the company's remaining equity stakes in Adevinta, Adyen and other former units mechanically pushed the reported figure to about $4.90. We treated that spike as non-recurring and used the median of the four years, about $2.92 per share, as the normalized starting point, rather than either extreme. Revenue grew about 8% in fiscal 2025, but most of that owner-earnings "growth" was working-capital noise from the equity stake sales rather than an improvement in the core marketplace's earnings power, so we did not carry the 2025 growth rate forward. Our base case assumes modest earnings growth in the near term (around 5% in year one, tapering toward 2% by year ten) as advertising revenue continues to grow as a share of the business and the company continues repurchasing stock, offset by the intense competition eBay faces from low-cost, high-volume marketplaces. Beyond the ten-year forecast we assumed a roughly flat, low-growth perpetuity given how mature and competitive online marketplaces have become — not a rate that assumes eBay steadily takes share. Our bear case assumes competitive pressure intensifies enough that Promoted Listings adoption plateaus among sellers and marketing costs rise to defend traffic, causing owner earnings to decline for several years before stabilizing at a lower level; it also reflects eBay's roughly $6.7 billion in total debt and commercial paper, which leaves less room for error if earnings soften. Our bull case assumes the advertising mix continues to scale faster, buybacks keep shrinking the share count at a healthy pace, and eBay's trust-and-authentication advantage in categories like collectibles and luxury goods sustains a premium take rate. Putting these together, we estimate eBay's shares are worth roughly $45 in our bear case, $67 in our base case, and $86 in our bull case, all as of today. Given the spread between the bear and base cases, the margin-of-safety price is meaningfully below fair value — around $53–$54 a share — to allow for the competitive risks described above. A few items we could not fully reconcile from the filings: the exact split of eBay's "changes in other current and non-current assets" cash-flow lines between core operating working capital and investment-related items in years prior to 2022, since the company's cash-flow statement format changed after its divestitures. This affected only the historical record, not the current valuation anchor.