Could Recession Pull EBAY Stock Down To $20?

Question: How would you feel if your eBay stock (NASDAQ: EBAY) fell by 75% in the next few months? Although this scenario might seem extreme, historical evidence shows that such dramatic declines can occur.

Let’s review the current situation: Year-to-date, eBay has outperformed the S&P 500, with a 9% gain versus the S&P 500’s 4% decline. This superior performance is partly due to increased investor optimism following Meta’s announcement that certain eBay listings would appear on Facebook Marketplace, potentially reinforcing eBay’s competitive position.

However, broader market concerns regarding a potential U.S. recession, driven by factors such as tariffs, are prompting a widespread sell-off. This market volatility raises concerns about eBay’s future performance.

eBay’s stock has shown considerable vulnerability during economic downturns. In 2022, it declined by 45% over a few quarters, and during the 2008 recession, it plummeted by an astonishing 75%. Currently, eBay is trading at $68, close to its 52‐week high of $71. Given this historical volatility, a significant market downturn could potentially push the stock price below $20. Clearly, individual stocks tend to be more volatile than diversified portfolios – so if you seek growth with less volatility than a single stock, consider the High-Quality portfolio, which has outperformed the S&P 500 and delivered returns exceeding 91% since its inception.

Why Is It Relevant Now?

Although eBay shows promising potential with its listings appearing on Facebook, investors should consider broader economic risks in their evaluation. As an online retail platform, eBay is susceptible to declines in consumer spending. In fact, recent retail sales data reported a modest 0.2% increase for the month, recovering from the previous month’s revised 1.2% decline, though this improvement fell short of the expected 0.6% growth. ^[]

Furthermore, consumer confidence has dropped to nearly a 2-1/2-year low in March.

Even though inflation concerns have eased somewhat, they remain a significant factor. President Trump’s assertive policies on tariffs and immigration have renewed worries about potential inflationary pressures. This uncertainty, combined with the U.S. economy’s susceptibility to contraction, heightens the possibility of a recession.

The global geopolitical landscape has become increasingly unstable, marked by the ongoing Ukraine-Russia conflict, rising trade tensions, and deteriorating relationships with traditional allies such as Canada, Mexico, and European nations. After a period of relative calm following a January ceasefire, Israel has resumed its military operations in Gaza, with lethal strikes occurring on March 18th. These external factors add considerable risk to the market environment. See our analysis here on the macro picture. Given these complex dynamics, investors should vigilantly monitor macroeconomic indicators when assessing positions in eBay or similar investments.

How Resilient Is EBAY Stock During A Downturn?

EBAY stock has experienced an impact that was slightly worse than the benchmark S&P 500 index during some recent downturns. Concerned about the effects of a market crash on EBAY stock? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes.

Inflation Shock (2022)

• EBAY stock dropped 44.9% from a high of $66.81 on 6 January 2022 to $36.81 on 2 October 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 8 October 2024
• Since then, the stock reached a high of $70.93 on 25 February 2025 and is currently trading at around $68

COVID-19 Pandemic (2020)

• EBAY stock declined 31.6% from a high of $38.49 on 4 March 2020 to $26.34 on 23 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 24 April 2020

Global Financial Crisis (2008)

• EBAY stock declined 74.7% from a high of $15.21 on 17 October 2007 to $3.85 on 9 March 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 19 April 2012

Protecting Wealth

eBay’s Revenues have declined at an average rate of 0.4% over the past three years, compared to a 6.3% increase for the S&P 500. Notably, the company’s operating margin has dropped from 28.1% in 2021 to 22.5% in 2024. However, this does not appear to be reflected in the company’s valuation, as EBAY stock is currently trading at 3.3x trailing revenues, representing a slight premium compared to its three-year average P/S ratio of 2.5x.

Considering the likelihood of a slowdown in growth and broader economic uncertainties, ask yourself this question: Do you plan to hold onto your EBAY stock now, or will you panic and sell if it begins to fall to $40, $20, or even lower levels? Holding onto a declining stock is never easy. Trefis collaborates with Empirical Asset Management—a Boston area wealth manager—whose asset allocation strategies delivered positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients with better returns and reduced risk compared to the benchmark index; offering a less volatile experience, as indicated by the HQ Portfolio performance metrics.

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