AI And Live Commerce Will Empower Sustainable Recommerce

Key Takeaways

• eBay's innovation in collectibles, AI-driven fashion recommerce, and live commerce is driving strong network effects and record-breaking growth in high-margin revenue streams.
  
• Enhanced payments, managed shipping, and sustainable marketplace initiatives are expanding buyer engagement and positioning eBay as a dominant global recommerce leader.
  
• Intensifying competition, reliance on volatile focus categories, regulatory pressures, and struggles to attract younger users threaten eBay's growth, margins, and long-term market relevance.

Catalysts

Operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally.

• Analyst consensus expects eBay's collectibles and trading cards to deliver strong GMV growth, but the data suggests the platform's dominance and continuous innovation in grading, inventory integration and live commerce could lead to network-effect-driven hypergrowth and recurring record-breaking quarters, setting a much higher GMV and revenue CAGR than currently modeled by the street.
  
• Analyst consensus points to AI-powered fashion and pre-loved apparel as a new focus, but early signs suggest eBay may become the global leader in sustainable recommerce, leveraging AI, direct brand sales, and high-impact marketing to drive high-margin, recurring revenue as secondhand becomes mainstream in fashion globally and boosts both average selling prices and take rates.
  
• Emerging platform-wide network effects, fueled by rapid expansion of live commerce (eBay Live), and full-funnel AI personalization, are likely to create a winner-take-most dynamic in enthusiast verticals, accelerating engagement and driving a sustained uplift in GMV per buyer and overall revenue long term.
  
• The rapid digitization of payments, embedded financial services like eBay Balance and Klarna adoption, are enabling not only conversion gains, but the onboarding of new buyer types (notably Gen Z and millennials), which can structurally raise eBay's active buyer count and significantly increase overall platform spend and long-term earnings power.
  
• eBay's expanding penetration of C2C (consumer-to-consumer) and geographic-specific managed shipping initiatives, along with the accelerating global demand for sustainable circular economy solutions, position eBay to capture disproportionate share as the leading global recommerce platform, driving high-margin revenue growth, robust cash generation, and supporting ongoing buybacks for EPS compounding.

eBay Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on eBay compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming eBay's revenue will grow by 6.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 20.9% today to 20.0% in 3 years time.
• The bullish analysts expect earnings to reach $2.5 billion (and earnings per share of $6.58) by about August 2028, up from $2.2 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 19.3x on those 2028 earnings, up from 19.0x today. This future PE is greater than the current PE for the US Multiline Retail industry at 17.6x.
• Analysts expect the number of shares outstanding to decline by 6.54% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.69%, as per the Simply Wall St company report.

eBay Future Earnings Per Share Growth

Risks

• The continued dominance and scale of online retail giants such as Amazon and Walmart, combined with growing consumer demand for tightly integrated, seamless shopping and logistics experiences, puts eBay at risk of further market share erosion and stagnating or declining revenue growth as it struggles to compete without its own fulfillment infrastructure.
  
• eBay's business model relies heavily on transactional fees, making it vulnerable to shifts in gross merchandise volume if competitors lower fees or if direct-to-consumer brands and social commerce channels lead more sellers and buyers to bypass marketplaces entirely, which would pressure eBay's revenue and net margins.
  
• The platform's recent growth has been driven by a few "focus categories"-notably trading cards, luxury, and fashion-which are susceptible to variable trends and one-off surges, as seen with recent strong product release cycles; any normalization or slowdown in demand for these categories could impact eBay's GMV and earnings growth.
  
• Intensifying regulatory scrutiny, such as tech antitrust actions, cross-border tax reforms, and rising compliance costs, particularly around tariffs and de minimis exemptions, introduces long-term complexity and potential constraints on eBay's profitability as it seeks to operate globally.
  
• eBay risks failing to attract and retain younger demographics who increasingly gravitate to social commerce experiences and newer platforms, while persistent issues such as the proliferation of counterfeit goods and challenges with trust and authentication could lower user engagement and depress marketplace revenue over time.

Valuation

• The assumed bullish price target for eBay is $102.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of eBay's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $102.0, and the most bearish reporting a price target of just $50.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $12.7 billion, earnings will come to $2.5 billion, and it would be trading on a PE ratio of 19.3x, assuming you use a discount rate of 8.7%.
  
• Given the current share price of $91.28, the bullish analyst price target of $102.0 is 10.5% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.