eBay Downgraded As Depop Spending, Vinted Competition Cloud Earnings
eBay heads into second quarter earnings with Wall Street increasingly concerned about how much it will cost to grow Depop while Vinted escalates its US expansion.
Wells Fargo and Citizens both downgraded eBay ahead of Wednesday’s report, citing rising competition in secondhand fashion and the likelihood that Depop will require more marketing investment than Wall Street has accounted for.
Wells Fargo analyst Ken Gawrelski lowered eBay from Equal Weight to Underweight and cut the firm’s price target to $92. The bank also reduced its 2027 earnings estimate by 10% and expects Depop spending to weigh on third quarter and full-year guidance.
Citizens moved eBay from Market Outperform to Market Perform, saying the core marketplace remains resilient, particularly in collectibles, but warning that higher customer acquisition costs at Depop could pressure profitability.
The concern centers on Vinted’s accelerating US push. According to the analyst reports, Vinted increased US paid search spending from about $16,000 in February to $236,000 in June.
Wells Fargo estimated Vinted’s US advertising impressions reached 127% of Depop’s level in April, while its daily active users stood at roughly one-fifth of Depop’s US audience.
Depop’s spending has been heavier still. Wells Fargo estimated its July marketing outlay was running at three times Vinted’s elevated level, while Citizens projected Depop could spend more than $250 million on marketing this year, up from $119 million in 2025.
Citizens said Depop had already recorded $42 million in marketing expense during the first quarter, raising questions about how much of Depop’s growth is being purchased through advertising and how long eBay will need to keep spending at that level.
eBay completed its acquisition of Depop from Etsy July 30 for approximately $1.4 billion, including $200 million in net purchase price adjustments and interest on top of the original $1.2 billion price.
Liz Morton
Depop gives eBay access to roughly 7 million active buyers, nearly 90% of them under age 34, and about $1 billion in annual gross merchandise volume. It also gives the company a stronger brand for reaching younger fashion shoppers than eBay has been able to build on its main marketplace.
eBay has said Depop is expected to become accretive to non-GAAP operating income in 2028. The estimates from Wells Fargo and Citizens suggest eBay may have to absorb more dilution before reaching that target.
Vinted has the scale to keep applying pressure. The company reported €10.8 billion in 2025 GMV, €1.1 billion in revenue and €62 million in net profit while continuing to expand its payments, shipping and international marketplace network.
It has also moved into new markets, including Australia, and renewed its US push with increased advertising and a New York presence.
eBay has already changed its business in response to Vinted. The company eliminated private seller fees in Germany and the UK, later adding buyer fees and managed shipping programs to recover some of the lost revenue. It has also tested zero final value fee promotions in US fashion and other categories.
Liz Morton
Buying Depop gives eBay a stronger direct competitor in secondhand fashion. It also adds another standalone marketplace to support as Vinted continues pressuring the fee model of eBay’s core business.
The spending concerns echo Ryan Cohen’s criticism of eBay’s marketing budget in GameStop’s unsolicited takeover bid, which eBay rejected in May.
Liz Morton
GameStop’s acquisition proposal noted that eBay spent $2.4 billion on sales and marketing in 2025 while reporting only one million additional active buyers. Even that increase came from adding Tise rather than growth in eBay’s existing buyer count.
At year-end, eBay reported 135 million active buyers after adding Tise, the Norwegian secondhand fashion marketplace acquired in October. Excluding Tise, the total remained at 134 million.
Cohen proposed cutting approximately $1.2 billion from sales and marketing, arguing that the spending was producing too little buyer growth. Tise sharpened that criticism because eBay’s entire 2025 net increase came from adding another marketplace rather than growth in the core platform.
Depop brings roughly 7 million active buyers, most of them under 34, but those users will also swell eBay’s consolidated total without showing whether the core marketplace is attracting more people.
Reported GMV will rise for the same reason, even if growth in the core marketplace does not accelerate. The value of that added volume will depend in part on whether those buyers remain active once the current marketing push eases.
Because the deal closed after the second quarter ended, it should have little direct impact on the results eBay reports Wednesday. The larger effect will appear in third quarter and full-year guidance.
Wells Fargo expects Depop to lift eBay’s GMV outlook while weighing on earnings guidance, estimating that marketing costs could reduce third quarter earnings per share by about $0.15. That could leave management explaining stronger reported volume alongside weaker profitability.
eBay is likely to emphasize Depop’s younger audience and long-term growth potential. Analysts will be looking for more immediate answers about marketing expense, customer acquisition costs, expected dilution and how quickly spending is expected to moderate.
They should also press eBay to report Depop’s buyers, GMV, revenue and operating expenses separately. Without that detail, it will be difficult to tell whether future growth is coming from the core marketplace, the acquisition or increased promotional spending across both.
The timing adds pressure from GameStop, which now owns approximately 9.8% of eBay and has said it is prepared to take its proposal directly to shareholders despite the board’s rejection. Any guidance reduction tied to Depop would give Cohen more evidence for his argument that eBay is spending too much for too little growth.
Wednesday’s results will show how eBay’s core marketplace performed before Depop entered the numbers. The guidance will show how much pressure eBay is willing to put on profitability to keep Depop growing.
