Last Update 10 Dec 25

EBAY: Focus Categories And AI Will Drive Marketplace Upside Through 2026

Analysts nudged their average price target for eBay higher to about $94 per share, citing improving focus category momentum, a more resilient GMV growth outlook into 2026, and supportive trading cards and AI driven marketplace initiatives, despite only modest tweaks to growth and discount rate assumptions.

Analyst Commentary

Street research has turned incrementally more constructive on eBay, with a series of price target increases and at least one rating upgrade reflecting growing confidence in the company’s ability to sustain merchandise volume growth and monetize key focus categories into 2026. However, views remain mixed, with a number of firms still cautious on how durable the current momentum will prove once comparisons toughen and AI related competitive risks become clearer.

Bullish Takeaways

Bullish analysts point to improving product execution in focus categories, arguing that a better end to end consumer experience can support mid single digit GMV growth by 2026 and justify higher valuation multiples.
Growth in collectibles and trading cards is viewed as a meaningful upside driver, with renewed category strength reinforcing flywheel effects around listings density, buyer engagement, and take rate leverage.
Improving GMV trends, from modest contraction in 2023 to mid single digit growth recently, are seen as evidence that marketplace initiatives are taking hold and can provide upside to earnings forecasts.
Investments in artificial intelligence for discovery and listing tools are framed as productivity and conversion enhancers that could expand margins and support sustained multiple expansion if execution remains consistent.

Bearish Takeaways

Bearish analysts caution that much of the near term GMV acceleration may already be reflected in the share price, limiting room for multiple expansion if growth normalizes to low single digits beyond 2025.
There is concern that collectibles and trading cards, while currently a strong tailwind, represent a non linear and partly exogenous demand cycle, making 2026 growth and valuation support harder to underwrite with conviction.
Some remain wary of AI related disintermediation risk across e commerce, preferring models seen as more insulated and warning that new AI integrations alone may not fully offset competitive threats to marketplace economics.
A few firms retain more conservative price targets and ratings, flagging tougher upcoming comparisons and the possibility that any slowdown in GMV could pressure the earnings multiple even if execution remains solid.

What's in the News

eBay launched "Built to Spec: Pete Davidson," a new series that pairs cultural figures with builders and auto enthusiasts to design custom vehicles using parts sourced on the platform, including a custom Honda Odyssey minivan and a charity auction benefiting Answer the Call (Key Developments).
The company updated its share repurchase activity, buying back over 7.1 million shares in the latest quarter for about $625 million, bringing total repurchases under the current authorization to nearly 139 million shares and $7.6 billion (Key Developments).
eBay issued new guidance for the fourth quarter of 2025, projecting revenue of $2.83 billion to $2.89 billion and diluted GAAP EPS of $0.96 to $1.01 (Key Developments).
For full year 2025, eBay reaffirmed expectations for revenue between $10.97 billion and $11.03 billion and diluted GAAP EPS of $4.09 to $4.14 (Key Developments).
Deutsche Bank Securities, Citigroup Global Markets, and Goldman Sachs were added as co lead underwriters for eBay’s approximately $400 million fixed income offering (Key Developments).

Valuation Changes

Fair Value: Unchanged at approximately $94 per share, indicating no meaningful shift in the base intrinsic value estimate.
Discount Rate: Fallen slightly from about 8.95 percent to approximately 8.91 percent, reflecting a modestly lower perceived risk profile or cost of capital.
Revenue Growth: Effectively unchanged at roughly 5.2 percent, suggesting stable long term top line growth assumptions.
Net Profit Margin: Steady at about 18.1 percent, implying no material revision to long run profitability expectations.
Future P/E: Edged down slightly from approximately 22.14x to about 22.12x, pointing to a marginally lower forward valuation multiple in the model.

Enhanced mobile experiences and AI-driven tools are increasing engagement, user growth, and listings, boosting top-line revenue and market relevance.
Expansion of high-value categories, value-added services, and first-party advertising is driving higher margins, take rates, and diversified high-margin revenue streams.
Heavy dependence on narrow growth categories, macroeconomic headwinds, and rising competition threaten eBay's revenue consistency, margin stability, and long-term relevance.

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?

Broadening global adoption of online commerce-especially in recommerce/second-hand goods-positions eBay to accelerate GMV growth and revenue as more consumers seek value and sustainability, supported by ongoing success in high-engagement categories like collectibles, trading cards, luxury fashion, and parts & accessories.
Expansion of mobile access and innovative app experiences-including new AI-powered listing tools, personalized communications, streamlined C2C managed shipping, and eBay Live social shopping-are driving higher seller and buyer engagement, which is likely to lift active user growth, listing volume, and ultimately top-line revenue.
Investment in verticalization for high-value categories, along with scaling value-added services such as authentication, bulk selling, and payments partnerships like Klarna, is increasing take rates and average selling prices, supporting revenue expansion and margin improvement.
Enhanced use of generative AI for listing optimization, ad targeting, search relevancy, and customer retention is reducing operating costs, boosting marketing ROI, and driving higher GMV per user, which should positively impact net margins and earnings.
Ongoing penetration of first-party advertising and financial services businesses creates additional high-margin revenue streams that are growing faster than GMV, strengthening take rate and operating leverage, and supporting sustained earnings per share and free cash flow growth.

eBay Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming eBay's revenue will grow by 5.4% annually over the next 3 years.
Analysts assume that profit margins will shrink from 20.9% today to 18.7% in 3 years time.
Analysts expect earnings to reach $2.3 billion (and earnings per share of $5.33) by about September 2028, up from $2.2 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $2.0 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.6x on those 2028 earnings, up from 19.3x today. This future PE is lower than the current PE for the US Multiline Retail industry at 21.6x.
Analysts expect the number of shares outstanding to decline by 4.59% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.75%, as per the Simply Wall St company report.

eBay Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

eBay's trading cards and collectibles categories are showing exceptional, but potentially unsustainable, growth that is highly dependent on product release cycles and market "hype"; this creates volatility in GMV and revenue, especially as management warns that growth in these areas may moderate and face tough year-over-year comparisons, impacting revenue consistency and margin stability.
The core business outside focus categories is only growing low-single digits or flat, suggesting that GMV and revenue reacceleration depends heavily on continued outperformance of a narrow set of verticals; if these focus categories underperform or competitive pressures increase, overall revenue growth could slow, limiting long-term earnings potential.
There is ongoing macroeconomic pressure, particularly in key international markets like the UK and Germany, with low consumer confidence and flat or negative GDP growth; this sustained weak backdrop could limit eBay's ability to grow GMV, especially internationally, putting downward pressure on revenue growth and earnings.
Despite substantial investments in AI-driven features, managed shipping, and vertical initiatives, eBay's reliance on third-party logistics and fragmented seller fulfillment systems persists; failure to sufficiently improve buyer delivery experience versus logistics-integrated competitors could erode repeat sales, compress net margins due to necessary shipping incentives, and weaken long-term user retention.
eBay faces intensifying competition for younger demographics, who increasingly prefer niche, visually rich, and mobile/social-first commerce platforms-potentially leading to a long-run decline in brand relevance, active buyer growth stagnation, and erosion of GMV and future earnings as user preferences shift away from eBay's marketplace model.

Valuation

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

The analysts have a consensus price target of $88.074 for eBay based on their expectations of its future earnings growth, profit margins and other risk factors. 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 $60.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $12.3 billion, earnings will come to $2.3 billion, and it would be trading on a PE ratio of 19.6x, assuming you use a discount rate of 8.8%.
Given the current share price of $92.46, the analyst price target of $88.07 is 5.0% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Focus Categories And AI Will Shape Marketplace Dynamics In The Coming Years