One value stock that’s caught my eye recently is eBay (NASDAQ: EBAY). It’s having a fantastic run in 2024, but still looks dirt cheap.

Could it be one of the best value stocks in the market today? Let’s take a look.

eBay’s a company I know pretty well as I’ve been a user of the online shopping platform for over 20 years now. I’m a big fan – not only have I bought loads of gear on it over the last two decades but I’ve also sold a ton of stuff I don’t need.

I just wish I’d invested in the company at some stage. Had I done so a decade ago, I’d have nearly tripled my money as the share price has risen from $22 to $63 over the period.

It may not be too late to get in here however. As I mentioned earlier, the stock looks cheap right now. With Wall Street analysts forecasting earnings per share of $5.17 next year, the forward-looking price-to-earnings (P/E) ratio here is just 12.2.

Value on offer today

That strikes me as a low valuation. Granted, this isn’t the growth company it was two decades ago. Right now, revenue’s only growing by a few percent a year. But this company’s quite a lot going for it from an investment perspective, to my mind.

For a start, it’s buying back a ton of shares. Over the five-year period to the end of 2023, its buyback yield was a staggering 14.1% (buyback yield’s calculated by dividing net buybacks by beginning market capitalisation). This buyback activity should boost earnings per share which, in turn, should boost the share price over time.

It’s also increasing its dividend at a rapid rate. Over the last three years, the payout’s climbed from 64 cents per share to $1 per share (a growth of 56%). Currently, the yield’s about 1.7%. But it could be a lot higher in the years ahead if the company keeps increasing its payout. It’s worth noting that the dividend coverage ratio (earnings per share divided by dividends per share) is very high at around four. So there’s plenty of scope for dividend growth.

One other thing to like here is the return on capital employed (ROCE). It’s quite high at around 13%. This means the company’s effective at generating profits. Companies with a high ROCE often turn out to be good long-term investments.

A top value stock

In terms of the bear case, one risk is competition from other online retailers. Today, eBay’s facing intense competition from both Chinese online shopping companies like Temu and new e-commerce players such as clothing resale platform Vinted.

This is definitely an issue to keep an eye on. The good news here is that eBay has quite a powerful brand – hopefully this will help it maintain market share.

Overall though, I believe there’s a lot to like about this stock and I think value investors should consider buying it. I think it could be one of the best value stocks in the market today.