Wells Fargo Downgrades eBay on Earnings Eve as Stock Slumps

eBay heads into its August 5 Q3 earnings report with a fresh analyst blow landing just hours before the bell — and a stock already down 6% on the day.

Wells Fargo's Ken Gawrelski moved decisively this morning, downgrading eBay to Underweight and cutting his target from $105 to $92. The timing is pointed: this is the same analyst who raised the target only in early July. The reversal flips Wells Fargo from fence-sitter to outright bear, and the $92 target sits well below the current consensus mean of $111. That consensus itself is now under pressure — eBay traded at $107.13 on Monday, already below the targets of several bulls. The constructive wave that swept through in mid-July (Wedbush at $135, Baird at $125, Citizens at $125) has not been followed by the stock; instead, eBay has given back roughly 6% over the past month and 5% over the past week.

The bull-bear divide is genuine. Bulls point to eBay's expanding footprint in collectibles, the Depop-driven push into recommerce and Gen Z consumers, and what the forward earnings score reflects — a 12-month forward EPS growth estimate ranked in the 90th percentile of the universe. Bears counter that competition in online marketplaces is intensifying, Depop's long-term contribution remains uncertain, and rising technology investment threatens margins. The EV/EBITDA multiple has expanded roughly 2.4% over the past month to 14.6x, a valuation that requires execution the bears are questioning. The price-to-book ratio has climbed sharply — up more than 2.5 points over 30 days to 10.9x — making the stock look expensive on assets even as the price has retreated.

One notably eye-catching institutional data point: GameStop Corp. appears in the top-holder list with a reported 9.77% stake of approximately 43.4 million shares — a filing that warrants verification before drawing conclusions, as the company type classification is unusual for a passive holder.

Short interest, by contrast, is no longer the concern it appeared a week ago. Shorts have actually been covering into this print. Positions fell nearly 15% over the past week to 3.4% of the free float — reversing the build that defined the pre-July 29 setup documented in the prior preview. The lending market is entirely relaxed: borrow availability runs at roughly 1,286% of short interest, meaning shares are abundant, and cost to borrow sits at a negligible 0.42%. Options positioning has nudged slightly more cautious, with the put/call ratio at 0.94 compared to a 20-day average of 0.89, but the move is a one-standard-deviation nudge rather than a defensive crowding signal.

The August 5 print is therefore less a test of whether short sellers can squeeze and more a test of whether management can deliver GMV and margin guidance that justifies the premium multiples — and silences the freshly emboldened bear from Wells Fargo.