Key Takeaways

eBay’s leadership in pre-owned goods and investments in AI and high-margin categories are driving sustained growth, enhanced net margins, and customer engagement.
Expansion of advertising, payments, and managed services is creating new profitable revenue streams while strengthening user trust and long-term value.
Intensifying competition, operational complexity, lagging innovation, and reliance on take rates threaten eBay's user growth, engagement, profitability, and long-term market position.

Catalysts

About eBay

Operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally.What are the underlying business or industry changes driving this perspective?

eBay is poised to benefit from the ongoing global shift toward online shopping, as sustained growth in internet access and mobile penetration expands the company’s addressable market and bolsters its international gross merchandise volume, which drives long-term revenue growth.
Rising consumer consciousness around sustainability and cost savings is fueling a structural shift towards pre-owned and refurbished goods, areas where eBay holds a leadership position; as these segments grow faster than traditional retail, eBay’s GMV and take rates are expected to outperform over the long term.
Continued investment in artificial intelligence—such as AI-powered listing tools and personalized search experiences—reduces listing friction and enhances buyer discovery, driving increased inventory, higher conversion rates, greater seller engagement, and ultimately accelerating revenue growth and improving net margins.
Expansion and monetization of higher-margin verticals such as collectibles, luxury goods, and refurbished items are propelling net margins upward, while broader adoption of authentication and managed services deepens user trust and fuels both average order value and customer lifetime value.
Accelerated growth in first-party advertising and payment solutions—supported by innovations like promoted listings and new fintech integrations—creates additional high-margin revenue streams, strengthening EBITDA and EPS growth prospects for the coming years.

eBay Earnings and Revenue Growth

eBay Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

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 6.9% annually over the next 3 years.
The bullish analysts assume that profit margins will shrink from 19.9% today to 18.7% in 3 years time.
The bullish analysts expect earnings to reach $2.4 billion (and earnings per share of $5.41) by about May 2028, up from $2.0 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 15.5x on those 2028 earnings, down from 15.8x today. This future PE is lower than the current PE for the US Multiline Retail industry at 15.8x.
Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.81%, as per the Simply Wall St company report.

eBay Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

eBay is facing persistent competitive pressure from dominant players like Amazon and fast-growing Asian e-commerce platforms such as Temu, Shein, and Alibaba, which could make it increasingly difficult for eBay to attract and retain buyers and sellers over time and negatively affect its future revenue growth and market share.
The long-term trend toward integrated omnichannel and vertically-integrated experiences may put eBay at a disadvantage compared to peers with proprietary logistics and physical retail footprints, resulting in weaker user engagement and retention, putting sustained pressure on GMV (gross merchandise volume) and, in turn, on revenue.
Environmental and regulatory scrutiny—including tariffs, cross-border shipping rules, customs friction, and potentially higher compliance costs—are cited as increasing operating complexity for eBay and are likely to drive up the company’s cost base and compress net margins long-term, especially as international trade becomes more challenging.
Despite some innovation, the platform continues to face stagnant active user growth and is perceived as less innovative and less appealing to younger and more social-commerce-oriented demographics, representing a direct threat to future buyer growth, overall platform activity, and revenue generation.
eBay’s continued reliance on raising take rates, optimizing costs, and category-specific M&A/partnerships for earnings growth, rather than consistently expanding underlying GMV, exposes it to margin compression and long-term risks to earnings if transaction growth remains limited and competitive intensity forces higher marketing and acquisition spend.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for eBay is $79.0, 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 $79.0, 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 $12.6 billion, earnings will come to $2.4 billion, and it would be trading on a PE ratio of 15.5x, assuming you use a discount rate of 7.8%.
Given the current share price of $70.36, the bullish analyst price target of $79.0 is 10.9% 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.