EBay Strikes $1.2 Billion Deal To Buy Depop From Etsy. Both E-Commerce Stocks Are Rallying.

Etsy (ETSY) has agreed to sell secondhand fashion website Depop to rival eBay (EBAY) for $1.2 billion. Both eBay stock and shares of Etsy jumped following the news, which coincided with a strong Q4 earnings report for eBay and mixed results for Etsy.

EBay said late Wednesday that it earned an adjusted $1.41 per share for its December-ended quarter, up 13% from a year earlier. That beat the $1.31 per-share earnings that analysts polled by FactSet were forecasting. Sales increased 15% to $2.97 billion, compared to analyst estimates of $2.88 billion.

				    ↑
					X

This video file cannot be played.(Error Code: 102630)

								What Big Tech Earnings Reveal About The AI Race
							

							

								See All Videos
							

						

					
					
						NOW PLAYING
						What Big Tech Earnings Reveal About The AI Race

Along with its Q4 results, eBay announced the all-cash deal to acquire Depop from Etsy.

Depop has “established itself as leading C2C (consumer-to-consumer) fashion marketplace,” eBay Chief Executive Jamie Iannone told analysts on a conference call late Wednesday.

Goods sold secondhand, or recommerce, is among the fastest-growing segments in retail, the eBay leader added.

Analysts were positive about the deal in commentary that followed the earnings report.

“Depop should be able to leverage eBay’s product and technology, including Magical Listing and Authenticity Guarantee,” Needham analyst Bernie McTernan wrote to clients Thursday. “Additionally, this type of asset fits with eBay, with GMS (gross merchandise sales) driven by enthusiast buyers.”

McTernan upped his target for eBay stock to 122 from a previous 115 and reiterated a buy call.

EBay Guidance For Q1

Meanwhile, eBay said it expects gross merchandise volume between $21.5 billion and $21.9 billion for the current quarter. That would represent 11% growth at the midpoint, a slightly acceleration from the 10% GMV growth for eBay in the December quarter.

Stifel analyst Mark Kelley said some of the strength in eBay outlook is powered by sources likely to prove less durable overall, such as the strength of the collectible coin market. But Kelley added that the company’s expectations for 6% GMV growth overall in 2026 indicate that “underlying growth in the core platform remains solid.”

He stuck to a neutral hold call for eBay stock but increase his price target to 94 from a prior 88.

“Overall, the path to a cleaner, sustainable GMV growth story is starting to show, and a continued free-cash-flow return policy (targeting $2 billion in repurchases in 2026 / raised quarterly dividend) enables eBay to speak to a wider investor base,” Kelley wrote in a note to clients late Wednesday.

EBay Stock Rallies On Depop News, Earnings

Meanwhile, eBay stock is ahead more than 6% premarket on the stock market today. Shares appear primed to climb back above eBay’s 200-day moving average.

Ebay stock managed a strong 40.6% rally in 2025 but was off to a slow start this year. Shares were down 6% year-to-date coming into its earnings results after Wednesday’s close. The stock has climbed 80.5% over the past three-years, outpacing the 68% gain for the S&P 500 over that period.

The company has focused on boosting growth by making investments in what it calls focus categories that are popular among users, including motor parts, collectibles and luxury goods. It has also adopted AI tools such as a “magical listing” feature that allow sellers to more easily add items to the site.

“The average household has $4,000 of stuff that could be sold on the platform, and less than 20% of that is online,” Iannone told analysts late Wednesday. “So, we’re really excited to bring that new capability and unlock all that inventory and really drive the significant TAM (total addressable market) in recommerce, and we also think Depop’s going to help us do that in a big way, too.”

Coming into the report, eBay stock had an IBD Composite Rating of 62 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating.

Etsy Stock Regains Ground

Meanwhile, the news also gave Etsy stock a boost in late trading Wednesday. The company sustained those gains after reporting its Q4 results Thursday morning.

The overall Q4 results were mixed, with Etsy reporting adjusted earnings of 92 cents per share, down 11% from a year earlier. Revenue for the December-ended quarter increased 6% to $881.6 million. Analysts were looking for earnings of 85 cents per share and sales of $884 million from Etsy, according to FactSet.

Etsy stock rose 20% premarket.

Etsy bought the U.K.-based Depop for $1.6 billion in an all-cash deal in June 2021. At the time, Etsy was a red-hot stock seeing a surge in growth powered by the pandemic.

But the company has struggled mightily as its Covid-era sales surge waned. Etsy shares are down more than 80% from a November 2021 high, entering Thursday’s trading.

Etsy Chief Executive Kruti Patel Goyal said in a news release that the Depop deal will allow the company to “focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers.”

Goyal took over as Etsy’s leader late last year, after former Chief Executive Josh Silverman stepped down after eight years in the role. Goyal was previously was Etsy’s president and chief growth officer. She has also led Depop for a time following Etsy’s acquisition.

YOU MAY ALSO LIKE:

Unsure How To Invest In Stocks In This Environment? Start Here

Top Growth Stocks To Buy And Watch

Find The Best Long-Term Investments With IBD Long-Term Leaders

Walmart Skids On Outlook, Earnings Edge Out Views