It has been nothing short of a roller coaster ride for shares of eBay (NASDAQ:EBAY) over the past several years, with each new year bringing about a different narrative. In 2017, eBay was was an outdated ecommerce marketplace updating itself and staging a huge turnaround. The numbers were accelerating higher, bulls were in control, and EBAY stock consequently soared.

Then, in 2018, the narrative reversed course as growth rates started to slow. The turnaround was broadly declared as over, bears took control, and EBAY plummeted.

Now, in 2019, bulls have taken control again. The numbers have stabilized in 2019, implying that the worst of the operational slowdown was left in 2018. Meanwhile, margins are tracking higher, the economy is broadly improving, and online retail remains red hot. As such, bulls have recaptured control of the stock, and shares are up 35% year-to-date.

The big question now: can this early 2019 rally in EBAY last?

The short answer: yes. Growth rates are stabilizing, and project to improve through the balance of the year. Meanwhile, margins are moving significantly higher and likewise project to continue to rise. Meanwhile, the financial market and economic backdrop continues to improve, and lends itself to improving growth trends for the rest of 2019.

As such, the growth outlook for eBay for the rest of the year is one defined by improving revenue growth metrics and expanding margins. Ultimately, that combination should keep the still fairly cheap EBAY stock on an upward trajectory.

Trends Are Improving

As is largely true with other stocks, the underlying trend in EBAY stock is significantly influenced by the trend in the company’s numbers. Specifically, when the numbers are trending down, the stock trends down. Conversely, when the numbers are trending up, the stock trends up.

In 2017, growth rates were improving. U.S. GMV growth started out the year at 4%, and finished the year at 8%. Global FX-neutral GMV growth went from 5% to 7%. Organic FX-neutral revenue growth went from 6% to 7%. Amid these growth rate improvements, EBAY stock soared.

In 2018, the opposite happened. Growth rates fell back. U.S. GMV growth started out the year at 7%, and finished the year at -1%. Global FX-neutral GMV growth went from 7% to 2%. Organic FX-neutral revenue growth went from 7% to 5%. Amid these growth rate slowdowns, the stock collapsed.

In 2019, we should get another inflection in growth trend. Specifically, GMV and revenue growth should re-accelerate higher this year as the company reaps the rewards of big 2018 platform and tech investments and benefits from an improving economic and consumer backdrop.

It also helps that organic revenue growth for the first quarter of 2019 came in a multi-quarter low of 3%. Thus, by the end of the year, it’s fairly likely that organic revenue growth accelerates towards 5%. If so, history says that this acceleration should provide a lift to EBAY.

Overall, EBAY stock broadly looks good for 2019 because the slowdown appears to be over, growth rates appear to be stabilizing, margins are improving, and there’s a decent chance for growth trend improvement this year amid a healthy economic and consumer backdrop.

Big Picture Implies Strong Upside

In the big picture, eBay projects as a stable company in the secular growth ecommerce market, and those stable growth fundamentals imply healthy long term upside in EBAY stock from current levels.

By now, it is abundantly clear that there will always be a place for eBay in the online retail world. Sure, the company is losing market share to various other online retailers, but no one else has replicated the at-scale, online garage sale model that eBay has perfected across the globe.

Some consumers clearly love this model. Even though Amazon (NASDAQ:AMZN), Wayfair (NYSE:W), Etsy (NASDAQ:ETSY), and various others have been around for a long time, eBay’s active buyer base continues to grow at a steady mid single digit rate. Thus, people aren’t jumping ship despite alternative options being widely available, and that’s a testament to the staying power of the eBay platform.

To be sure, that doesn’t mean eBay will grow as quickly as the ecommerce market. The ecommerce market will continue to grow much more quickly, mostly because eBay is already very big and because the online garage sale model which eBay employs does have a limited audience.

But, staying power in the ecommerce market does imply stable growth going forward. By stable growth, I mean that eBay should be able to continue to grow its buyer base and revenues at a low to mid single digit growth rate over the next several years. Concurrently, margins should continue to improve as the company continues to focus on cost discipline through cutting things like low ROI marketing spend.

Low to mid single revenue growth on top of mild margin expansion and buybacks should drive EPS towards $4 by fiscal 2025. Based on a market average 16 forward multiple, that equates to a fiscal 2024 price target for EBAY stock of $64. Discounted back by 9% per year (one point below 10% to account for the yield), that implies a reasonable fiscal 2019 price target of over $40.

Bottom Line on EBAY Stock

Calendar 2017 was a great year for eBay. Calendar 2018 was a rough one. Now, calendar 2019 is shaping up to be a repeat of 2017, implying that the big year-to-date rally in EBAY stock isn’t quite over yet.

As of this writing, Luke Lango was long EBAY and AMZN.