E-commerce stocks thrived at the pandemic's onset. Hundreds of millions of folks were looking to avoid shopping in person and flocked online to find the things they wanted and needed. eBay (EBAY 1.63%) and Etsy (ETSY -2.62%) were beneficiaries as sales surged.

That said, now that economies are reopening, the tailwind is turning into a headwind. Given that backdrop, let's consider which is the better stock to buy: eBay or Etsy. 

eBay

Importantly, and this is also true for Etsy, eBay does not own the inventory listed on its platform. Instead, it acts as a middleman, bringing buyers and sellers together to transact. eBay takes a percentage of these transactions as revenue. 

It's been a challenging decade for eBay. Its revenue has actually contracted over the past 10 years, declining at a compound annual rate of 1.1%. However, this is primarily due to divestitures. For instance, in Q2 2021, eBay sold 80% of its Korean marketplace business to Emart for $3 billion.

More impressively, eBay has expanded earnings per share at a compound annual rate of 23.6% in that time. Given its asset-light business model, when revenue exploded in 2020 and 2021 in response to the pandemic, the bulk of it flowed to the bottom line.

Admittedly, the economic reopening is a troubling headwind, causing revenue in its most recent quarter, which ended on March 31, to fall by 5%. There is no telling how far this will decrease as folks have more options for spending their money as the pandemic eases. Still, eBay's business has proven resilient through several economic cycles, so investors can expect it to overcome these headwinds relatively unscathed.

Moreover, compared to Etsy, eBay's stock is a relative bargain at a price-to-sales ratio of 2.9 versus Etsy's 6.1. 

EBAY PS Ratio Chart

EBAY PS Ratio data by YCharts

Etsy

Etsy is a younger version of eBay in many ways. It, too, runs an asset-light business model that brings buyers and sellers to the platform to transact. Etsy bills itself as a destination for folks looking to buy unique, hand-crafted items. For instance, Etsy's sales exploded at the pandemic's onset as people flocked to the site to purchase hand-crafted face masks. 

EBAY Revenue (Annual YoY Growth) Chart

EBAY Revenue (Annual YoY Growth) data by YCharts

Of course, younger, smaller companies often grow faster than their counterparts, and Etsy has not been the exception. Its revenue has exploded from $75 million in 2012 to $2.3 billion in 2021. Impressively, Etsy turned profitable in 2017, earning $0.68 per share, which increased to $3.40 in 2021.

Etsy faces the same economic reopening headwinds as eBay, but revenue growth is decelerating rather than turning negative like its rival. Customers are diverting spending away from e-commerce sites toward away-from-home experiences like restaurants, travel, and movie theaters.

eBay is the better stock to buy now

While both are excellent asset-light businesses, delivering robust earnings per share, if you had to pick only one stock to buy, it should be eBay. It comes down to valuation. eBay is selling at less than half the price-to-sales ratio as Etsy, and having already achieved scale in customers and sellers, it's a more resilient business.