QS Research · Michael Burry's Scion Capital analyst template · 2006
EBAY INC (EBAY)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $123.52 (close 2026-11-10)
Conclusion: PASS
Conviction medium · base case -27% · downside -32% · upside +8%
Using GAAP EBITDA of $3.03B and TTM net income of $2.10B (GAAP P/E 25.8x; adjusted P/E 25.7x), the market is paying a premium for a platform whose Q3 2026 GAAP net income fell 16% and whose Q4 growth guide slows to 7%-9%. The independent peer-median P/E anchor is 18.9x, or -27%; at today's 25.8x, 7.9% growth gives only +7.8% upside, while a 20% earnings decline at a compressed 21.9x P/E gives -32%. Quality is real—ROIC 20.1% vs WACC 6.6%, FCF yield 4.4%, net buyback yield 3.70%—but the price already discounts growth, and no dated catalyst justifies a higher multiple. I pass: the base is negative, but the short rule is not met because the anchored base is -27% rather than -30% or worse.
Key numbers
- Share price: $123.52
- Market cap: $54.23B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $12.39B
- EV / EBITDA (TTM): 19.7x
- P/E (TTM): 25.8x
- FCF yield: 4.4%
- Price / book: 12.29x
- Earnings-quality flags (TTM): Mark-to-market on the company's own stock (warrants) -$7.0M (0% of net income)
- P/E, adjusted (TTM): 25.7x
- EV / FCF (TTM): 24.8x
- Revenue growth (latest fiscal year): +7.9%
- ROIC (TTM): 20.1%
- WACC: 6.6%
- Economic profit spread: +13.5 pts
The 15 boxes
- ✓ 1. Long-form business notes
eBay is a global marketplace that earns commissions and advertising fees on GMV; FY2025 GMV was nearly $80B, 51% outside the US, with 135M active buyers. The FY2020-to-FY2025 filings show a narrower portfolio after the StubHub sale and planned Classifieds transfer, with revenue rising from $8.89B in FY2020 to $11.10B in FY2025 while operating income fell from $2.64B to $2.28B. TTM to Sep 2026 revenue is $12.39B, operating income $2.52B, and operating cash flow $3.05B.
- ✓ 2. Competitive advantage
The sources support scale and brand, not pricing power. eBay's marketplace carries nearly $80 billion of 2025 GMV across 190+ markets with 135 million active buyers and 2.5 billion live listings, and it monetises that flow as a take rate: revenue rose from $10.28B (FY2024) to $11.10B (FY2025) and $12.39B TTM to 2026-09-30, with gross profit of $7.93B in FY2025 (about 71% of revenue, computed) and capex of only $525M (about 4.7% of revenue), which is a genuinely asset-light, scale-driven model. Against that, operating income fell from $2.92B in FY2021 to $2.28B in FY2025 on higher revenue, so operating margin went from roughly 28% to 20.5% (computed), and the 10-K describes vigorous competition from retailers, distributors, auctioneers, search engines and other C2C/B2C/B2B commerce participants. Advantage rests on brand/IP and two-sided network size; there is no evidence in these sources of switching costs, licences or price leadership.
- ✓ 3. 10-Q takeaways
For the three months ended September 30, 2026, eBay reported net revenues of $3.206 billion, up 14%, GMV of $23.166 billion, up 15%, take rate of 13.84% versus 14.03%, and operating margin of 19.2% versus 20.3%. Nine-month net revenues were $9.429 billion, up 16%, and continuing operating cash flow was $2.394 billion versus $1.315 billion. eBay repurchased $689 million of stock and paid $138 million of dividends in the quarter, completed the $1.4 billion Depop acquisition on July 30, 2026, and held $3.3 billion of cash and non-equity investments at September 30, 2026. The 10-Q risk section points to the 2025 Form 10-K, while the computed 10-K diff shows 98 paragraphs new or rewritten past recognition.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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