EBay Inc's shares soared as much as 11 percent on Thursday, a day after the online auctioneer posted quarterly results that topped market expectations, leading at least nine analysts to raise their price targets.

Lazard Capital Markets, Broadpoint Amtech and RBC gave their top ratings to the stock, saying eBay's latest results reflected improvements in its fundamentals and also in overall e-commerce trends.

The company's shares were up $1.57 at $21.02 in afternoon trade on Nasdaq after touching a day's high of $21.57. Their percentage gain was the eighth highest among the S&P 500.

Trading volume rose to more than 40 million shares, nearly double their 10-day moving average, making them the ninth most actively traded on Nasdaq.

We believe eBay's second-quarter earnings report demonstrated improving fundamentals, and provided evidence that marketplace repairs are likely to effect more positive trends over time, Lazard analyst Colin Sebastian said in a note.

Collins Stewart analyst Sandeep Aggarwal said eBay's fixed price format was competing more effectively with Amazon and other competitors, and information asymmetry on eBay -- in terms of merchant quality, shipping cost, shipping time and fraud -- was far less than in the past.

Broadpoint analyst Benjamin Schachter said with its core business improving and easy year-ago comparisons, eBay is set up to outperform Wall Street estimates in the second half.

The trend toward stabilization and improvement will reduce the perceived risk of investing in eBay, as the probability of a significant revenue miss has diminished considerably, Bernstein analyst Jeffrey Lindsay said, adding the company's third-quarter outlook seemed conservative.

ATTRACTIVE VALUATION

EBay's stock is up 39 percent this year through Wednesday, compared with a 22 percent rise in the Nasdaq composite index.

Even with the recent run-up in the stock, eBay's stock was attractive on a valuation basis compared with its large-cap Internet peers such as Amazon, Yahoo and Google, Broadpoint's Schachter said.

Although more clarity is required on the longer-term growth prospects of its core business, the risk/reward for the stock is now better balanced, he said.

Lazard's Sebastian said despite the recent rebound in shares, eBay has still underperformed its Internet comparables because of skepticism over the future of its marketplace.

However, given tangible evidence of marketplace stabilization, eBay's healthy margins and strong cash flow generation provided justification for a more constructive view on valuation, he said.

The valuation gap that currently exists between eBay and Internet comparables is likely to close over time, he added.

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