eBay Inc. (EBAY): A Bull Case Theory

We came across a bullish thesis on eBay Inc. on Value investing subreddit by Ok_Spirit5374. In this article, we will summarize the bulls’ thesis on EBAY. eBay Inc.'s share was trading at $82.91 as of December 2nd. EBAY’s trailing and forward P/E were 18.34 and 13.97 respectively according to Yahoo Finance.

eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. eBay is accelerating its transformation from a legacy auction platform into a high-growth, AI-enhanced marketplace, leveraging its leadership in recommerce to expand into high-value categories and merchant services. Q3 2025 results demonstrated 9% revenue growth to $2.8 billion, a 10% increase in GMV to $20 billion, and 25% growth in ad revenue to $525 million, with rising average spend and engagement despite flat buyer counts.

Key drivers include vertical expansion across Motors, Collectibles, Luxury, and refurbished tech, as well as trust-enhancing programs like Secure Purchase and Authenticity Guarantee. The integration of AI tools, including listing automation, visual search, and personalized discovery, is improving conversion rates, basket sizes, and cross-platform selling. eBay’s early partnership with OpenAI for its Operator AI agent positions the company as a pioneer in autonomous, agent-driven e-commerce, providing new traffic, enhanced item discovery, and future monetization potential.

The Motors segment, strengthened by the Caramel acquisition, now enables full end-to-end transactions on-platform, while eBay Live’s interactive shopping experience boosts engagement in collectibles and luxury categories. Ads, currently 2.6% of GMV and growing, provide high-margin revenue leverage, while Klarna BNPL, seller capital, and global shipping solutions increase transaction convenience and recurring revenue. International GMV accounts for roughly half of total GMV, with cross-border friction mitigated through logistics tools and partnerships.

Trading at ~15x forward EPS versus peers at 20–25x, eBay offers significant re-rating potential. With over $2.5–3 billion in annual free cash flow, aggressive buybacks, and consistent dividends, the company combines growth with stability. Its infrastructure, payments, and AI capabilities provide a pathway to a Shopify-like merchant platform, unlocking multi-year upside. With multiple catalysts—AI adoption, ad growth, Motors expansion, and merchant tools—eBay’s 2025–2028 trajectory could generate 30–50% upside, supported by strong margins and robust free cash flow.

Previously we covered a bearish thesis on eBay Inc. (EBAY) by Kostadin Ristovski, ACCA in November 2024, which highlighted flat GMV, limited growth in developed markets, high valuation, and risks from international exposure. The company's stock price has appreciated approximately by 34.81% since our coverage. The thesis still stands as growth challenges persist. Ok_Spirit5374 shares a contrarian perspective, emphasizing AI adoption, vertical expansion, and ad and Motors monetization.

EBay Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held EBAY at the end of the second quarter which was 51 in the previous quarter. While we acknowledge the risk and potential of EBAY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EBAY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.