Still bullish on $eBay

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I’ve put a bunch of bullet points below for you to look through so you can research on your own if anything sparks your interests, but its a pretty long list, so here's the gist: 

eBay’s transformation is accelerating. Revenue and GMV are rising, AI integration, trust  services, and vertical expansion across Motors, Collectibles, and Luxury are the primary drivers. With ebay holding the lead as the dominant recommerce platform, the infrastructure supports an expansion into future Shopify-like merchant platforms. 

Its OpenAI partnership gives it an early advantage in autonomous, agent-driven shopping. Programs like Secure Purchase, Authenticity Guarantee, and eBay Live are shifting the buyer experience to remain inline with how online-shopping has shifted.

 Great cash flow, share buybacks, and growing ad monetization are giving investors growth and stability. Though Q4 guidance provides low margins expectations, AI-enabled conversion gains, and runway for new monetization (via ads etc), eBay’s 2025 to 2028 could provide eBay with a 30–50% upside. 

Take a look at eBay q3 2025 earnings report, call, and presentation  for more information and insight on how I’ve come to this conclusion.

The basics

• Q3 2025 revenue up 9% to $2.8bn / GMV up 10% to $20bn / ad rev up 25% to $525m
• Buyer count flat at 134m, but average spend and engagement increasing
• AI, category verticalization, and trust features are increasing growth

Valuation and capital return

• Trades ~15x forward EPS vs peers at 20x to 25x, means plenty of room for re-rating
• DCF intrinsic value ~140 per share, ~35 to 40% undervalue
• Generates over $2.5–3bn in annual free cash flow
• Aggressive buybacks and consistent dividends provide EPS growth and downside protection
• Caramel acquisition has already paid for itself

Verticals

• Motors “Caramel” integration enables full transaction flow from financing to delivery
  • Never having to leave the ebay website is a major UX win, during q3 earnings they said a $150k car was purchased this way on ebay
• High-value categories add new rev via trust and optimized logistics
• Collectibles, luxury goods, and refurbished tech showing double digit GMV growth

AI

• AI listing tools automate titles and descriptions, reducing friction for sellers
• Visual search and personalized discovery are improving conversions
• Early indicators show higher value basket sizes and cross platform selling potential
• 20 years of data is allowing eBays data scientist and developers how to understand shopper behaviors and thinking to increase conversions

eBay x OpenAI 

• eBay partnered with OpenAI in early 2025 to pilot Operator, an AI agent that performs autonomous tasks, including shopping
• Agents can browse listings, compare items, and direct users to eBay
• buyers shopping through AI instead of search,
• The collaboration gives eBay the power eBay access OpenAI’s ecosystem (ChatGPT, Operator) bringing in new users and increased conversions
• New traffic source, better discovery of niche items, stronger AI reputation, and future monetization through agent-driven sales
  • still in research preview
• eBay is now an early in the autonomous e-commerce space, showing they understand how to pivot toward AI-driven discovery

eBay Live

• Launched in 2022 focusing on collectibles, now expanded to luxury, sneakers, and apparel
• Combines live video, chat, and instant checkout for more interactive buying
• Higher conversions compared to standard listings
• Still in beta with limited seller access, strongest adoption in high-value categories
• Social engagement drives GMV growth and differentiates eBay from competitors 
• Long term potential to become a significant sales channel, like drops, influencer partnerships, etc)

Monetization & ads

• Ads equal 2.6% of GMV, growing 23% year over year, with a goal of 3 to 4%
• Half of listings are promoted
  • 4.4m sellers use ad products
• Overall take rate near 14% with head room via ads, payments, and trust services
• Ads give high-margin leverage (think  Amazon’s ad flywheel)

Trust & payments & logistics

• Authenticity Guarantee and Secure Purchase programs increase high-value transaction trust
• Klarna BNPL and seller capital loans support sales and add recurring revenue
• Expanded global shipping solutions reduce friction and increase cross-border trade

eBay VS. 

• Amazon: eBay dominates used and collectible segments and enjoys superior margins
• Etsy: broader buyer base and improved social resale features enable category overlap
• Shopify: infrastructure and traffic allow expansion into merchant tools and services
• Other niche competitors: acquisitions of TCGplayer, Tise, and other acquisitions consolidate category leadership in this space

International Growth

• About half of GMV is international
• Cross-border friction from tariffs offset by automated customs and new shipping programs
  • Tariff calculators, logistics tools, etc
• Wins in UK and Scandinavia through partnerships and acquisitions for localizations
  
  

They already have the infrastructure to develop a Shopify-Like platform

• Handles over 2bn listings
• Existing payments, shipping APIs, and AI infrastructure make expansion into merchant services feasible
• a “Buy with eBay” checkout button integration
• Ebay storefronts could evolve into a commerce infrastructure platform similar to Shopify

Watchlist

Keep an eye out for these confirmations

• GMV growth above 6%
• Active buyers exceeding 135m or enthusiast buyers over 17m
• Ads revenue above 3% of GMV by 2026
• Operating margin at or above 27%
• Free cash flow above 3bn annually

Catalysts. 

• AI agent adoption providing higher conversion
• Ad revenue growth exceeding 30% year over year
• Motors Secure Purchase adoption surpassing 30% of eligible transactions
• International GMV growth recovery
• Major buyback or sale of non-core assets
• Launch of advanced merchant tools
• Poor economic conditions creating the ideal environment for recommerce and secondhand goods

TLDR

• eBay is shifting from a legacy auction site to an AI-enhanced, trust-centered marketplace
• Higher take rates and ad penetration drive earnings leverage
• Expanding into merchant infrastructure adds multi-year growth potential
• Strong margins, robust free cash flow, and shareholder returns create 30–50% upside through 2028