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eBay Inc. (EBAY) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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eBay Inc. (EBAY)

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Intrinsic Value (DCF)

Current$94.37
→
Intrinsic$78.53
-17%
$50.38$78.53$132.03
Market implies 18% growth for 5 years
EBAY trades at a premium to our conservative estimate — investors expect above-average performance.
At $94, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $50 → Bull $132. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →10%12%14%16%
8%$96$106$116$126
10%$65$72$79$86
12%$48$53$58$63
14%$37$41$45$49

Bull Case

  • Bull case ($132) offers 40% upside at 16% growth, 9% discount
  • Conservative 14% growth assumption is achievable based on track record

Bear Case

  • Bear case ($50) implies 47% downside at 11% growth, 12% discount
  • Price reflects 18% growth expectations vs 14% historical — high bar to clear
  • Trading 17% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$2.22B
Year 2$2.52B
Year 3$2.86B
Year 4$3.25B
Year 5$3.69B
Terminal$54.26B

📐 Model Inputs

Growth Rate13.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.96BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is EBAY stock undervalued or overvalued?
🟡 FAIRLY VALUED

EBAY trades at $94.37, within 10% of our $78.53 intrinsic value estimate. At 10.0% WACC and 13.5% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $51.09 (bear) to $117.03 (bull).

What is EBAY's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.96B, projected at 13.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $5.10B net debt and dividing by 0.50B shares: Bear $51.09 | Base $78.53 | Bull $117.03. Current price $94.37 implies -14% to base case.

How is EBAY's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 13.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($44.45B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 22.7x.