Citi recently upgraded eBay (EBAY.US) rating from "Neutral" to "Buy," significantly raising the target price to $100. This adjustment reflects the effectiveness of the veteran e-commerce platform's strategic transformation. According to Citi's research report, eBay is reshaping its market competitiveness through focusing on high-growth categories, technology upgrades, and user experience optimization.

The outperformance of core financial metrics has directly driven the rating upgrade. eBay's second-quarter earnings showed that its Focus Category GMV grew over 10% year-over-year, significantly higher than the company's overall growth rate. The collectibles category continues to lead, with trading cards GMV achieving accelerated growth for the 10th consecutive quarter.

Management simultaneously raised 2025 fiscal year guidance, projecting full-year revenue growth of 4-6% and non-GAAP earnings per share (EPS) growth of 10-12% to $5.43, more specific than the previous "high single-digit" growth expectations.

Citi analysis indicates that 7% GMV growth in the US market serves as the primary driving force, with improving consumer demand and weaker-than-expected tariff impacts providing support for performance.

Technology upgrades and platform optimization represent key levers in eBay's strategic transformation. The company optimizes Google PLA listing titles through generative AI, improving quality scores and rankings. Using proprietary large language models (LLM) to detect and replace low-quality product listings has increased listing acceptance rates to over 90%. In terms of user experience, the launch of AI shopping assistants and professional agents has further strengthened platform interaction efficiency. These initiatives directly drive Focus Category GMV acceleration, proving that technology investments are beginning to translate into commercial value.

The restructuring of valuation models highlights market confidence. Citi employs a discounted cash flow (DCF) method, using 8.8% weighted average cost of capital (WACC) and 2.5% terminal growth rate to calculate eBay's valuation at $98. Combined with approximately $2 per share minority shareholder equity value, the target price reaches $100.

Horizontal comparisons show eBay's expected 2026 EV/EBITDA multiple of 14.0x and P/E multiple of 22.0x, both above five-year average levels and positioned in the upper-middle range among e-commerce platform industry peers, reflecting market repricing of its growth prospects.

Despite challenges in European markets, eBay's deep cultivation in the C2C (consumer-to-consumer) field partially hedges international market risks. Citi believes that through differentiated competitive strategies, the company's moat established in specific vertical areas is gradually demonstrating value.

This rating adjustment marks market recognition of eBay's transformation effectiveness, though future attention should continue focusing on the commercialization efficiency of technology investments and the sustainability of core category growth.