Recently, Morgan Stanley released a research report on eBay, with a key focus on analyzing four possible future development scenarios for eBay's secondhand clothing platform Depop. The report maintains an "Overweight" rating on eBay with a target price of $127. This analysis comes as eBay's stock price has fallen about 15% from its May 2026 high, with the market expressing concerns about eBay's increased investment in Depop and its competitive position against rival Vinted.

The report notes that the most likely scenario (40% probability) is that eBay and Vinted will enter a sustained investment battle. This could put short-term pressure on eBay's 2027 earnings, but Morgan Stanley believes Depop has a larger user base in the United States, and this first-mover advantage could help eBay consolidate its position in long-term competition.

The second scenario (30% probability) is that both sides will invest with relative restraint, avoiding excessive spending on inefficient advertising. In this case, eBay can both reduce earnings pressure and continue to benefit from the growth of the online resale market.

The third scenario (20% probability) is that Vinted may reduce investment due to the excessively high cost of competing in the U.S. market and redirect resources to other markets. Morgan Stanley believes this could be positive for eBay and help reduce the competitive pressure facing Depop. Historical data shows that Vinted once adopted an aggressive investment strategy in Europe, especially in the UK, where it significantly increased investment starting in 2021 and ultimately gained a larger market share.

The least likely scenario (10% probability) is that eBay chooses to scale back its investment in Depop. Although this could bring short-term earnings improvement, it would create greater development opportunities for Vinted in the U.S. market, making it the biggest long-term risk in Morgan Stanley's bullish case for eBay.

Morgan Stanley also cited other secondhand trading industry cases as references. For example, after Poshmark went public, its marketing expenses grew faster than revenue for two consecutive years, and it was ultimately acquired for $1.2 billion, indicating that strong investment does not necessarily equate to success.

Meanwhile, eBay's recent overall performance shows growth momentum: second-quarter revenue increased 15% year over year. eBay Chief Financial Officer Peggy Alford said that some of the additional investment in Depop may come from adjustments to existing marketing resources rather than entirely new costs. Performance guidance for the coming quarters will help the market more clearly judge the actual effectiveness of this strategy.

Source: 4 key scenarios could shape eBay’s next chapter · Originally published on 2026-08-19