Understanding eBay (EBAY) as an “online specialty shopping district”: a long-term assessment centered on cyclical earnings and “seller economics”

* This report is prepared based on data as of 2026-01-08.

What does eBay do? (for middle schoolers)

At its core, eBay runs a “huge online flea market and specialty shopping district.” eBay itself doesn’t buy inventory in bulk and resell it. Instead, it makes money by providing a safe place where people who want to sell (sellers) and people who want to buy (buyers) can find each other and complete transactions.

Who does it create value for?

• Sellers: everyone from casual individuals (unwanted items, collections, etc.) to small shops and larger merchants (used, new, and specialized goods)
• Buyers: bargain hunters, people searching for specific items, collectors looking for rare goods, and more

How does it make money? (three core revenue pillars)

• Fees (the “rent”): earns a set fee when an item sells and the transaction is completed
• Advertising (incremental customer-acquisition fees): sellers pay extra when they want their listings to stand out
• Transaction infrastructure (the “trust layer”): payment processing, shipping-related support, dispute handling, and—depending on the category—authentication checks, all designed to support confident transactions

Why is it chosen? (value proposition)

• Selection: higher odds of “only-here” inventory—used goods, one-of-a-kind items, older models, and collector-oriented products
• Access to global buyers: listings can reach not just domestic buyers but also overseas buyers (a bigger edge in certain categories)
• Rules and safety net: reduces peer-to-peer transaction anxiety (payments, shipping, disputes) through platform processes and protections

Today’s earnings engines and the categories being strengthened

• Core marketplace: improves search and conversion, generating fee revenue
• Advertising business: seller-driven paid traffic. It typically scales as marketplace activity increases
• Category focus: collectibles, fashion, vehicles and parts, etc. For example, a rebound in collectibles demand (trading cards, etc.) has been suggested

Future direction (areas that could become future pillars)

eBay’s future differentiation will likely be less about “how big revenue is today” and more about how much it can deepen marketplace liquidity (seller supply × buyer discovery). From that angle, the following initiatives could matter.

• AI shopping agents: moving beyond traditional search toward a conversational “advisor” at the center of the shopping experience
• More advanced AI-powered listing support: reducing listing work via copy generation and product-info completion, potentially lifting listing volume
• Reducing friction in vehicle transactions: through the Caramel acquisition, aiming to bundle paperwork, title transfer, insurance, and delivery to streamline cumbersome high-ticket transactions

“Internal infrastructure” that is hard to see in the numbers but matters

eBay appears to be trying not to rely solely on external general-purpose AI, instead building and operating in-house AI models tailored to specific use cases to optimize cost and speed. This can be hard to capture in near-term metrics, but over time it can meaningfully influence AI feature velocity, operating cost, and experience differentiation.

Analogy: eBay is a “giant shopping street”

• The more sellers (stores) there are, the broader the selection—and the more buyers (foot traffic) it attracts
• The operator (eBay) earns more fees as transactions rise, and earns more advertising revenue as demand for visibility increases
• AI can act like a guide that “makes listing prep easier” and “helps buyers get to the right store faster”

In one sentence: eBay is a marketplace company that enables transactions in used and one-of-a-kind goods and monetizes through fees and advertising.

Long-term fundamentals: understanding eBay’s “business type”

For long-term investing, the first step is understanding a company’s “earnings model type.” eBay is less a business where revenue climbs steadily every year and more one where profits can swing meaningfully from one fiscal year to the next.

Lynch classification: a Cyclicals-leaning hybrid

Based on the source-article synthesis, eBay most closely fits a Cyclicals-leaning profile. While it is profitable, it has also posted loss years over the long run, creating a “cycle plus structural factors” pattern where profits can form peaks and troughs.

Why it can be viewed as Cyclicals-leaning (data-based rationale)

• Large EPS variability: 5-year CAGR is +13.5%, but the volatility metric is relatively high at 1.20, and there are loss years in FY (2017, 2022)
• Profit sign reversals: over the last five years, profits have swung between positive and negative
• Gradual revenue, volatile profits: revenue CAGR is +6.7% over 5 years and +1.6% over 10 years—low-to-mid growth—and less consistent than EPS

Growth profile over 5 and 10 years (the long-term shape of the “type”)

• 5 years: Revenue CAGR +6.7%, EPS CAGR +13.5%, FCF CAGR -5.3%
• 10 years: Revenue CAGR +1.6%, EPS CAGR +58.2%, FCF CAGR -7.8%

The key point is that while EPS appears to have grown substantially, free cash flow (FCF) has been weak over the long term. From a “growth quality” standpoint, whether cash is compounding alongside profits is a core investor checkpoint.

Profitability: ROE is high, but includes volatility

ROE in the most recent FY is a strong 38.3%. However, the five-year ROE range is very wide at 25.7%–143.2%, so it’s hard to call profitability “consistently high” based on a single-year ROE.

FCF margin: the latest reading looks thinner than the historical center

FCF margin is 14.3% on a TTM basis. The median over the past five years (FY) is 19.5% (indicative range 18.9%–21.3%), so the latest TTM figure screens below the historical FY center. While FY vs. TTM can diverge due to time-window effects and we avoid over-asserting, it’s still worth noting that “near-term cash generation looks thinner.”

Sources of EPS growth: not only revenue, but also “per-share lift”

The source-article synthesis notes that eBay’s long-term EPS growth isn’t fully explained by revenue growth alone and appears to be meaningfully supported by a declining share count (buybacks, etc.) that boosts per-share results. While this reflects “EPS growth via shareholder returns,” investors should separately evaluate whether the underlying business (revenue and FCF) is growing at a comparable pace.

Near-term (TTM / last 8 quarters): is the long-term “type” intact?

With Cyclicals-leaning companies, misreading “where we are in the cycle” can throw off investment decisions. Here we use TTM (last 12 months) and the direction over the last eight quarters to check whether the long-term type still holds.

TTM facts: revenue, EPS, and FCF are all growing

• Revenue (TTM): $10.714bn, growth (TTM YoY): +4.48%
• EPS (TTM): 4.67, growth (TTM YoY): +14.3%
• FCF (TTM): $1.528bn, growth (TTM YoY): +9.77%

At least on a TTM basis, the company is profitable and growing year over year. Put differently, it’s not in a “bottoming phase with sustained losses.”

However, the momentum call is “Decelerating”

Under the source-article definition, the last 12 months (TTM YoY) is treated as “momentum,” and the 5-year CAGR as “normal growth capacity.” The combined assessment is Decelerating.

• Revenue: the last year’s +4.48% is below the 5-year average of +6.7%
• EPS: the last year’s +14.3% is not easy to characterize as “clearly above” the 5-year average of +13.5%
• FCF: even with a positive last year, the last two years (~8 quarters) are weak at an annualized -11.9%

This is the key interpretive point for eBay: TTM reads like recovery/normalization, while the two-year window points to softer profits and cash generation. When long-term (FY) and short-term (TTM) tell different stories, it’s generally safer to treat it as a time-window effect.

Financial health (directly tied to bankruptcy-risk assessment)

Because marketplaces don’t carry inventory, they can be less exposed to sudden working-capital stress; however, profits can compress quickly when volumes fall in cyclical troughs. Below are the key facts on leverage, interest coverage, and cash cushion.

• D/E (latest FY): approx. 1.52x (debt is not light relative to equity)
• Net Debt / EBITDA (latest FY): 0.58x (not indicative of an extremely heavy level)
• Interest coverage (latest FY): approx. 9.80x (interest-paying capacity is maintained)
• Cash ratio (latest FY): approx. 1.02 (cash vs. short-term obligations is neither extremely thin nor clearly ample)

The takeaway is that while there’s no basis to call the situation “imminently dangerous” based on the latest data, for a Cyclicals-leaning company with volatile profits, a relatively high D/E can shape how investors think about “defensive capacity.”

Shareholder returns: dividends are “not the main act, but not negligible”

Dividend level and positioning

• Dividend yield (TTM, based on $90.47 share price): approx. 1.25%
• 5-year average yield: approx. 1.57% (the latest is lower vs. the 5-year average)
• 10-year average yield: approx. 4.08% (the latest is materially lower vs. the 10-year average)

The 10-year average may look elevated because it could include periods when yields were unusually high (share-price declines or special factors affecting dividend levels). The safest approach is to treat this as an observed outcome (without asserting the cause).

Dividend growth and pace

• Dividend per share (TTM): $1.13062
• DPS growth (5-year CAGR): +14.0% per year
• DPS growth (10-year CAGR): difficult to assess over this period
• Most recent 1-year dividend increase (TTM, YoY): approx. +4.6%

There’s a visible gap: the most recent one-year increase (+4.6%) is lower than the 5-year CAGR (+14.0%). However, because this is a single-year comparison, we don’t conclude structural deceleration; we simply note the difference.

Dividend safety (from earnings, cash, and balance sheet)

• Payout ratio (earnings-based, TTM): approx. 24.2%
• Payout ratio (FCF-based, TTM): approx. 34.6%
• FCF dividend coverage (TTM): approx. 2.89x
• Balance sheet: D/E approx. 1.52x, interest coverage approx. 9.80x

On a TTM basis, the dividend is covered by earnings and FCF and doesn’t look oversized relative to cash generation. That said, with D/E on the higher side, the profile is closer to “moderate” than “bulletproof.”

Dividend reliability (track record)

• Consecutive years of dividends: 18 years
• Consecutive years of dividend increases: 6 years
• Most recent dividend cut/suspension year: 2018 (fact)

There’s a long history of paying dividends, but cuts/suspensions haven’t been zero. This is a profile that often needs more context before being grouped with “never-cut dividend” names.

Note on peer comparisons

Because the source article does not include direct peer dividend-metric comparisons, we do not claim a relative ranking within the sector (top/middle/bottom). In absolute terms, the combination of ~1.25% yield, ~24% payout ratio, and ~2.9x FCF coverage typically reads more like “paying within reason” than “selling the story with a high yield.”

Where valuation stands today (only versus its own history)

Here we don’t compare to the market or peers; we simply and neutrally place today versus eBay’s own history (primarily the last 5 years, with the last 10 years as a supplement). We cover six metrics: PEG, PER, FCF yield, ROE, FCF margin, and Net Debt/EBITDA.

PEG: well above the historical range

• PEG (current): 1.36
• 5-year median: 0.03 (typical range 0.02–0.05)
• 10-year median: 0.03 (typical range 0.02–0.06)

The current PEG is far above the typical range over both the last 5 and 10 years. With EPS (TTM) trending more downward over the last two years while PEG is above 1, the setup can mechanically push PEG higher (without asserting causality).

PER: above both the 5-year and 10-year ranges

• PER (TTM): 19.36x
• 5-year median: 14.79x (typical range 4.22x–17.55x)
• 10-year median: 9.79x (typical range 4.66x–16.15x)

The current PER is elevated—above the upper end of the typical range for both the last 5 and 10 years. For a Cyclicals-leaning company with volatile profits, PER can look very different depending on where earnings are in the cycle; this isn’t a “contradiction,” but it does describe a price zone that can warrant caution.

Free cash flow yield: below the historical range

• FCF yield (TTM): 3.74%
• 5-year median: 6.14% (typical range 5.37%–8.90%)
• 10-year median: 9.19% (typical range 5.98%–14.06%)

The current FCF yield is low, below the typical range over both the last 5 and 10 years. While FCF (TTM) over the last two years has been flat to slightly down, the yield remains low.

ROE: “mid-range” versus history

• ROE (latest FY): 38.29%
• 5-year median: 43.26% (typical range 25.71%–143.16%)
• 10-year median: 41.77% (typical range 18.46%–82.99%)

Latest ROE sits roughly in the middle of the typical range over both the last 5 and 10 years. Over the last two years, ROE includes periods that are flat to slightly down.

FCF margin: below the historical (FY) range (note the time-axis difference vs. TTM)

• FCF margin (TTM): 14.26%
• 5-year median (FY): 19.48% (typical range 18.90%–21.32%)
• 10-year median (FY): 22.42% (typical range 19.39%–26.88%)

The current FCF margin is below the typical range over both the last 5 and 10 years. Because the historical distribution is FY-based while the current figure is TTM-based, this includes a time-window effect; still, the directional point that it “screens below the historical center” is clear.

Net Debt / EBITDA: near the middle of the range (though trending higher over the last two years)

Net Debt / EBITDA is an inverse indicator where lower (more negative) implies greater financial flexibility.

• Net Debt / EBITDA (latest FY): 0.58
• 5-year median: 0.58 (typical range -0.56–1.25)
• 10-year median: 0.84 (typical range 0.14–1.41)

The current value sits within the 5- and 10-year ranges and is near the median—an “average to slightly conservative” position. However, over the last two years there have been periods where the metric has moved higher (upward bias).

Summary of the “positioning” across the six metrics (not a conclusion, just where it sits)

• PEG and PER are higher (above range) versus the last 5 and 10 years
• FCF yield is low (below range) versus the last 5 and 10 years
• ROE is mid-range, while FCF margin is low (below range)
• Net Debt / EBITDA is near the middle of the range

Cash flow trend: “EPS looks strong, but FCF depth warrants scrutiny”

In eBay’s long-term data, EPS growth stands out, while FCF growth is negative over both 5 and 10 years. FCF is up on a TTM basis, but the two-year window also frames FCF as negative on an annualized basis (-11.9%), meaning short-term recovery and medium-term softness coexist.

Rather than labeling this simply “bad,” decision quality improves by looking at it through a few practical lenses.

• Investment/operating effects vs. deterioration in core business strength: is FCF thinner because of front-loaded investment in trust/safety and AI, or because underlying transaction quality is weakening?
• Side effects of profit optimization: even if near-term profits rise via advertising and fees, if seller unit economics are squeezed, future supply can thin and weigh on long-term FCF

Why eBay has “won”: the essence is “discovery × trust × liquidity”

In one line, eBay’s success has come from operating a venue over time where used, one-of-a-kind, and highly specialized items naturally gather—reducing search costs and transaction anxiety. It isn’t an inventory retailer; the core is a design that increases liquidity in a world of distributed inventory (individual sellers, small merchants, specialty shops).

Conditions where strengths tend to show (where eBay fits)

• Products that are hard to commoditize: condition, scarcity, and incremental information matter
• Buyers do not choose “on price alone”: discoverability and confidence matter more

Conditions where it tends to be weaker

• Areas such as standardized new goods where comparison is easy and price, shipping, and returns tend to be decisive (more prone to price competition and ad competition)

Growth drivers: shift from chasing GMV to “sell-through certainty” and “seller profitability”

Across the source-article synthesis, eBay’s growth is framed as less about “forcing volume” and more about building a marketplace that balances a listing experience that sells with high probability and seller profitability.

• A receptacle for reuse demand: inflation and value-seeking behavior can favor used goods (though still exposed to the cycle)
• Advertising revenue growth: incremental upside as more sellers use ads to “get found”; however, if ads become a necessity, they can also become a source of dissatisfaction
• Accumulating trust and safety: authentication, protection, and fraud prevention can determine liquidity in higher-ticket categories
• Cross-border transactions: can be an advantage, but policy changes that increase friction can have outsized impact. Reports indicate an accelerated move to revise the U.S. de minimis import exemption (a change from August 29, 2025)
• Expanding external entry points: tests such as showing eBay listings on Facebook Marketplace could increase off-platform exposure and drive incremental buyer inflows

Customer positives and pain points: “marketplace temperature” can shift before the numbers do

What customers value (Top 3)

• Breadth of selection: a high likelihood of finding niche items
• Access to global demand: meaningful value for sellers in reaching overseas buyers
• A defined transaction playbook: confidence that rules and protections cover payments, shipping, and disputes

What customers are dissatisfied with (Top 3)

• Opacity / accumulation of fees and add-on charges: the more ads are used, the harder it can be to see which costs actually “worked”
• A perception that search and visibility depend on ads: if sellers feel items won’t sell without ads, ads become effectively mandatory and can compress seller profits
• Perceived cost burden of trust and safety measures: if stronger protections are applied rigidly, users can feel more friction and collateral impact

The “story shift” underway: do ads look like “training wheels” or a “toll”?

With marketplaces, the risk is that the narrative breaks before the financials do. As a prominent issue over the last 1–2 years, the source article highlights a direction where sellers are more openly questioning the value of paid advertising.

• Change in ad-attribution rules: from February 26, 2025, under certain conditions, a mechanism is being introduced where “if an item sells within 30 days of an ad click, ad fees may be charged even if the buyer did not personally click the ad”
• Fee revisions paired with “stronger protections”: from February 14, 2025, selling-fee adjustments across many categories have been announced, citing investments in protections and tools

Over the last year, revenue, profits, and cash generation have grown, while over the last two years profits and cash generation have been soft. If that’s layered with a narrative of “higher seller costs (fees + ads),” then even if near-term numbers are stabilizing, the possibility that supply-side dissatisfaction is building becomes something to monitor (without asserting it as fact).

Invisible Fragility: 8 items to check precisely when things look strong

This section lays out potential “failure modes” that often show up as gaps between narrative and numbers rather than as an immediate crisis. It is one of the most important chapters for long-term investing in eBay.

1) Dependence on sellers: fragile to rising burdens

eBay’s supply is seller-driven. If sellers conclude “there’s no profit left” or “the work has increased,” listings can decline, selection can thin, and buyer discovery value can fall. The more ads are viewed as effectively mandatory rather than optional, the more stress can build, and the 2025 change in ad-attribution rules could unsettle seller sentiment.

2) Rapid shifts in the competitive environment: low-price cross-border players and regulatory spillover

Low-price cross-border players can reset consumer expectations (price and delivery) and create price pressure in certain categories. Separately, being grouped into the same bucket as others in a tightening regulatory environment is itself a risk. Reports that French authorities flagged illegal-goods sales on eBay alongside multiple platforms could be a signal that leads to higher oversight and compliance costs, brand damage, and tighter listing restrictions.

3) Loss of product differentiation: search and visibility crowded out by ads

The more users feel ads dominating the experience, the more degradation can set in: “sellers can’t get visibility without ads and margins fall,” and “buyers find it harder to search.” This is an “invisible” risk because it can show up in selection quality and browsing experience before it appears in short-term revenue.

4) Friction in cross-border logistics and tariff administration

eBay doesn’t hold inventory, but the cross-border experience is shaped by logistics and tariff administration. Reports of an accelerated revision to the U.S. de minimis import exemption could become a friction factor for small sellers that rely on cross-border transactions.

5) Organizational culture degradation: no clear evidence, but structurally important

In the current materials, there isn’t enough decisive evidence to generalize cultural deterioration, and we cannot write that “culture is deteriorating.” However, in marketplaces, trust and safety, support, and rule enforcement are part of the product. If these weaken due to cost cutting or complexity, seller and buyer narratives can deteriorate at the same time—an important structural point.

6) Profitability deterioration: thinning cash generation can be an early signal

Even with profits, the fact pattern shows cash-generation intensity looking thinner than the historical center (FCF margin is low versus the historical range). Even if revenue is lifted via ads and fees, if it harms seller unit economics, marketplace quality can erode over time—this can become a classic case where “the story breaks before the numbers.”

7) Financial burden: not immediately dangerous, but flexibility is not unlimited

While interest-paying capacity (interest coverage ~9.80x) is at a reasonable level, leverage (D/E ~1.52x) is not light. In cyclical troughs when profits fall, this structure can create tension between supporting sellers (promotions, etc.) and maintaining financial conservatism.

8) Industry-structure change: tighter regulation, safety, and listing restrictions

Illegal-goods, safety, and counterfeit controls tend to move toward tighter enforcement over time. Stronger regulation can improve trust, but it also has a dual nature: it can raise operating costs and tighten listing restrictions. The French authorities’ comments are a non-trivial signal in that context.

Competitive landscape: eBay competes by category, not via a single head-on rival

eBay’s competition isn’t a simple contest of “lowest price” or “fastest delivery.” It’s a category-by-category game where the winning formula varies by vertical.

Key competitors (the players competing for user time)

• Amazon (including Marketplace): strong in standardized new goods. Strengths include standardized delivery/returns experiences and funnel design. Fee structures and FBA condition changes can also influence seller behavior
• Etsy: overlaps in “discovery shopping” with a tilt toward handmade/vintage
• Walmart Marketplace: competes as a channel for mass retail and new goods
• Mercado Libre: an indirect competitor depending on region; can create pressure in cross-border competition
• Poshmark / Depop / ThredUp: category specialists, mainly in used apparel
• Facebook Marketplace: competes as an entry point for local transactions, but could also become an acquisition channel via tests that display eBay listings
• Temu / Shein / AliExpress: indirect competitors by shaping expectations for low-price cross-border shopping (behavior varies by category)

Category-by-category competitive map (where eBay tends to be strong/weak)

• Used, one-of-a-kind, collectibles: value centers on search quality, authentication/protection, and access to cross-border demand. eBay’s core battlefield
• Standardized new goods: price, delivery, returns, and ad efficiency dominate. eBay is more likely to be disadvantaged on Amazon’s playing field
• Peer-to-peer local transactions: Facebook Marketplace and others are strong. eBay can differentiate via a shipping-enabled design, but is still exposed to entry-point competition
• Seller advertising and promotions: ads are a revenue pillar across players. For eBay, the focal point is the structure where supply can thin if ads erode seller profits too much

Moat and durability: strengths are “operational assets,” but erosion can also start from the supply side

What could constitute eBay’s moat

• Liquidity created by deep supply in niche, used, and one-of-a-kind goods (strong where selection itself is the value)
• Operational trust-and-safety assets: accumulated authentication, fraud prevention, and dispute handling
• Access to cross-border demand: in certain categories, can be a reason items “sell higher / sell more easily” than elsewhere

Factors that could impair the moat (durability weaknesses)

• Deterioration in seller unit economics: fees plus ads compound, thinning supply (listings)
• Commoditization of the entry point: external platforms or AI control the purchase funnel, and eBay is treated as merely an “inventory source”

Switching costs (how easily users can move)

• Sellers: there are switching costs such as ratings and operating know-how, but many can multi-home, making full lock-in less likely
• Buyers: because the use case is more “discovery-driven” than a daily-essentials funnel, switching to other services can happen. However, in categories where “the inventory is here,” eBay can remain an entry point

Structural position in the AI era: potential tailwinds, but also risk of losing the entry point

eBay’s position is less about building foundational AI infrastructure and more about applying AI in the application layer of transactions, discovery, and trust.

Areas where AI can be a tailwind (points of strengthening)

• Reinforcing network effects: in used and one-of-a-kind goods, thicker supply increases discovery value and can accelerate the flywheel
• Leveraging data advantages: accumulated transaction, search, price formation, and condition-difference data can be used to improve “discovery” and “trust”
• AI integration (seller × buyer): listing assistance starting from photos, providing APIs for generating listing previews, etc., advancing the “componentization” of listing
• Raising mission-criticality: as a sales channel for sellers and a discovery entry point for buyers, importance can increase depending on category

Areas where AI can be a headwind (points of weakening)

• AI substitution risk: search, comparison, and purchase decision-making could be absorbed by external AI agents, weakening the platform’s front door
• Greater dependence on entry points: external-channel integrations can be tailwinds, but if traffic partners control too much of the funnel, eBay can be commoditized

eBay’s response: pulling AI into its own experience

eBay is also working to introduce conversational shopping support (AI shopping agents) to keep discovery inside the platform. Competition in the AI era is in a transition phase between “being disintermediated by external AI” and “integrating AI into the first-party experience.”

Management, culture, and governance: narrative consistency and how it breaks

CEO focus (Jamie Iannone) and strategic alignment

• Refocusing on arenas where it can win (used, one-of-a-kind, high-engagement categories): raising trust (authentication, guarantees, experience) to drive loyalty and higher-ticket transactions
• The biggest competitor is “hassle”: using AI to reduce listing hassle and search hassle, strengthening supply and demand at the same time

This direction fits the competitive framing that eBay isn’t trying to win the standardized new-goods price/logistics game, but is advantaged in categories where “discovery and trust determine value.”

How the leadership profile can show up in culture and decision-making

• User-centric culture: strengthens the feedback loop from sellers and buyers into product improvements
• A culture of making AI a frontline tool: embedding it as everyday productivity rather than isolating it in a single research group
• Focus and prioritization: supports investment in priority categories
• Moving the organization faster: an announcement in late April 2025 indicated organizational changes such as integrating product and market teams and unifying engineering

Generalization of employee reviews (no individual quotes)

• Areas that tend to be viewed positively: strong sense of purpose if employees connect with values such as community and trust/safety; visible impact of product improvements on user experience; moves to expand AI learning opportunities
• Areas that tend to be viewed negatively: with many stakeholders and complex rule enforcement, decision-making can feel slow; as initiatives that “impose new rules on sellers” increase, friction can rise (there are also notices of stricter returns policies, etc.)
• Change point (news): reports in May 2025 that the Israel site will be closed in 2026 Q1, affecting 200+ people. It may have localized psychological impact, but it is not sufficient information to rewrite company-wide culture definitively

Fit with long-term investors (culture/governance lens)

• Positive fit: a strategy focused on winnable arenas is easy to underwrite, and AI is positioned as practical friction removal
• Areas requiring caution: if ad and fee design appears to erode seller unit economics, pushback can build. Site closures and organizational changes can create short-term instability

KPIs investors should monitor (a causal checklist)

eBay’s outcomes aren’t driven only by “did volume rise,” but by which categories are turning and how healthily they’re turning. Where possible, it’s useful to track the following by category.

Seller side

• Active seller count (net adds / net declines)
• Listing volume and close rate (with vs. without ads, by category)
• Whether the combined burden of fees + ad spend is being perceived as “effectively mandatory” (seller take-rate perception)

Buyer side

• Search-to-purchase funnel (search exits, browsing depth, purchase conversion)
• Complaint rate, return/dispute rate, authentication-related issue rate (whether trust is becoming friction)

Channel structure

• External traffic mix (search engines, social, partners) and its relationship to transaction completion rates
• Expansion/contraction of partnerships such as Facebook Marketplace and the quality of referred traffic (close rate, issue rate)

Two-minute Drill (summary for long-term investors: the backbone of the investment thesis)

The core long-term question for eBay is whether it can maintain and deepen liquidity—a flywheel where supply (listings) and demand (discovery) reinforce each other—as an “online specialty shopping district.” eBay doesn’t hold inventory and can focus on improving search, trust, and operations; however, the two-sided model also makes the key weakness clear: if seller unit economics are squeezed, supply thins, selection deteriorates, and recovery can slow.

• Core strength: in used, one-of-a-kind, and collectibles, selection and discovery are the product, and as trust (authentication/protection) accumulates, more higher-ticket transactions can circulate
• Growth levers: use AI to reduce listing and discovery friction, thickening liquidity; expand entry points via external channel partnerships
• Primary watch item: whether ads and fees are becoming a “toll” that breaks seller buy-in; whether regulation, cross-border friction, and entry-point commoditization by external AI agents are advancing
• Where the numbers stand (facts): on a TTM basis, revenue, EPS, and FCF are growing, but momentum is assessed as decelerating. Valuation metrics (PEG and PER) sit on the high side versus the company’s own historical range, while FCF yield and FCF margin sit on the low side