eBay’s SWOT analysis: AI integration and trading cards boost stock outlook

eBay Inc. (NASDAQ:EBAY), a global e-commerce leader, has been navigating a complex market environment characterized by macroeconomic uncertainties and evolving consumer behaviors. Recent analyst reports highlight the company’s resilience and strategic initiatives, while also noting potential challenges in maintaining market share and growth rates.

Company Overview and Recent Performance

eBay operates a global online marketplace that connects millions of buyers and sellers worldwide. The platform is known for its diverse product offerings, with a particular strength in secondhand and refurbished goods, which comprise approximately 40% of its Gross Merchandise Volume (GMV). The company’s strong market position is reflected in its impressive financial metrics, with annual revenue reaching $10.47 billion and industry-leading gross profit margins of 71.9%. In recent quarters, eBay has demonstrated steady improvement in its fundamental performance, with a focus on enhancing user experience and expanding its reach in key categories.

The company’s first quarter 2025 results showed positive momentum, with GMV and revenue posting slight year-over-year growth. Active buyers increased by about 1% to 134 million, indicating a stable user base. Notably, eBay’s focus categories, particularly trading cards and collectibles, have outperformed the overall marketplace growth, with some segments experiencing triple-digit growth in recent quarters.

Strategic Initiatives and AI Integration

eBay has been actively investing in strategic priorities to drive long-term growth. A key focus has been the integration of Generative AI (GenAI) technologies to enhance platform capabilities. These AI-driven improvements have led to measurable enhancements in GMV trends, including better search and discovery features, optimized selling flows, and improved Google PLA listings.

The company has also formed strategic partnerships to expand its reach and improve user experience. Collaborations with OpenAI’s Operator and Meta aim to increase seller exposure and attract more buyers to the platform. Additionally, eBay has expanded its Buy Now, Pay Later (BNPL) options through a partnership with Klarna, which has shown promising early results in driving higher GMV volumes.

Financial Outlook and Market Position

Analysts have provided mixed outlooks for eBay’s financial performance in the coming years. According to InvestingPro data, 18 analysts have recently revised their earnings estimates upward for the upcoming period, with EPS forecasts for 2025 at $5.59. While some firms have maintained positive ratings, others have expressed caution due to macroeconomic uncertainties and potential impacts from tariffs. The company’s guidance for 2025 suggests low single-digit percentage FXN GMV growth and high single-digit percentage year-over-year non-GAAP EPS growth. Based on InvestingPro’s Fair Value analysis, eBay is currently trading near its fair value, suggesting balanced market pricing.

eBay’s market position remains strong, particularly in the secondhand goods market, where it faces less direct competition from major e-commerce players. The company’s focus on trading cards and collectibles has been a significant driver of growth, with these categories outperforming the overall marketplace.

Risks and Challenges

Despite its strengths, eBay faces several challenges in the current market environment. The ongoing macroeconomic uncertainty and potential impacts from tariffs pose risks to the company’s performance. While eBay’s exposure to China-related tariff risks is limited, with only 5% of its GMV involving the US-China corridor, indirect effects on consumer spending and supply chains could still impact the business.

Some analysts have noted that eBay’s revenue and active buyer growth rates are lower relative to peers, suggesting potential e-commerce market share losses. The company will need to continue innovating and improving its platform to maintain its competitive position in the face of these challenges.

Bear Case

How might ongoing macroeconomic uncertainty affect eBay’s performance?

The persistent macroeconomic uncertainty poses significant risks to eBay’s performance. As consumers face inflationary pressures and economic instability, discretionary spending on non-essential items may decrease. This could lead to reduced transaction volumes on eBay’s platform, particularly for higher-priced items or luxury goods. Additionally, economic downturns often result in consumers seeking more value-oriented purchases, which could shift the mix of products sold on eBay towards lower-priced items, potentially impacting the company’s revenue and profit margins.

Furthermore, macroeconomic challenges could affect sellers on the platform, potentially leading to reduced inventory availability or increased pricing pressures. This could create a ripple effect, impacting eBay’s GMV and overall marketplace health. The company’s international operations may also face additional headwinds from currency fluctuations and varying economic conditions across different regions, further complicating its financial outlook.

Could potential e-commerce market share losses impact eBay’s long-term growth?

eBay’s relatively lower revenue and active buyer growth compared to some of its e-commerce peers raises concerns about potential market share losses. If this trend continues, it could have significant implications for eBay’s long-term growth prospects. As the e-commerce landscape becomes increasingly competitive, with new entrants and existing players constantly innovating, eBay may find it challenging to maintain its position without substantial investments in platform improvements and marketing.

Market share losses could lead to a self-reinforcing cycle where fewer buyers lead to reduced seller activity, and vice versa, potentially eroding eBay’s network effects. This could make it more difficult for the company to attract and retain both buyers and sellers, impacting its ability to generate revenue from transaction fees and advertising. Moreover, if eBay loses ground in key categories or geographies, it may struggle to regain its footing, as consumers and sellers may develop loyalty to competing platforms. To mitigate this risk, eBay will need to continue focusing on its strengths, such as its position in secondhand goods and collectibles, while also innovating to capture new growth opportunities.

Bull Case

How could eBay’s focus on AI and platform improvements drive future growth?

eBay’s strategic investment in AI technologies, particularly Generative AI (GenAI), has the potential to significantly enhance the platform’s capabilities and drive future growth. By leveraging AI to improve search and discovery features, eBay can create a more personalized and efficient shopping experience for users. This could lead to increased user engagement, higher conversion rates, and ultimately, growth in GMV and revenue.

The integration of AI into selling flows and listing optimization can also benefit sellers by streamlining the process of creating and managing listings. This could attract more sellers to the platform and increase the volume and quality of listings, further enhancing eBay’s marketplace appeal. Additionally, AI-driven improvements in areas such as fraud detection and customer service can increase trust and satisfaction among both buyers and sellers, potentially leading to higher retention rates and increased platform usage.

Furthermore, eBay’s use of AI to optimize Google PLA listings could improve the company’s visibility in search results, driving more traffic to the platform and potentially increasing market share. As eBay continues to refine and expand its AI capabilities, it could create a significant competitive advantage, differentiating itself from other e-commerce platforms and driving long-term growth.

What potential does the trading cards and collectibles segment hold for eBay?

The trading cards and collectibles segment has emerged as a significant growth driver for eBay, with some categories experiencing triple-digit growth in recent quarters. This segment presents a unique opportunity for eBay to capitalize on its strengths in facilitating transactions for rare, valuable, and niche items. The collectibles market often benefits from scarcity and emotional value, which can lead to higher price points and increased transaction volumes during periods of enthusiasm.

eBay’s established reputation as a go-to platform for collectibles gives it a strong foundation to build upon. By focusing on enhancing the user experience for this segment, such as improving authentication services, providing better tools for valuation, and creating dedicated spaces for collectors to connect, eBay can further solidify its position as the premier marketplace for trading cards and collectibles.

Moreover, this segment often attracts passionate and engaged users who may be less price-sensitive and more likely to make frequent purchases. By nurturing this community, eBay can potentially increase user retention and drive higher average transaction values. The collectibles market also tends to be somewhat resilient to economic downturns, as some collectors view their purchases as investments, which could provide eBay with a buffer against broader macroeconomic challenges.

As eBay continues to invest in and expand its offerings in the trading cards and collectibles segment, it has the potential to not only drive significant revenue growth but also to attract a loyal and high-value user base that could contribute to the platform’s overall success in the long term.

SWOT Analysis

Strengths:

• Strong position in secondhand goods market
• Resilience to tariffs due to business model
• Growing focus categories like trading cards
• Established global brand and user base
• Effective integration of AI technologies

Weaknesses:

• Lower revenue and active buyer growth compared to peers
• Potential e-commerce market share losses
• Dependence on discretionary consumer spending

Opportunities:

• Expansion of AI integration for improved user experience
• Growth potential in trading cards and collectibles segment
• Strategic partnerships with tech companies and payment providers
• Increasing demand for sustainable and secondhand goods

Threats:

• Ongoing macroeconomic uncertainty
• Potential impacts from tariffs and trade policies
• Intense competition in the e-commerce space
• Evolving consumer preferences and shopping behaviors

Analysts Targets

• Citi Research: $100.00 (September 8th, 2025)
• BMO Capital Markets: $70.00 (May 1st, 2025)
• Barclays: $77.00 (May 1st, 2025)
• Bernstein: $65.00 (April 22nd, 2025)
• Piper Sandler: $85.00 (March 28th, 2025)

eBay continues to navigate a complex market environment, balancing its strengths in secondhand goods and collectibles with the challenges of maintaining growth in a competitive e-commerce landscape. The company’s focus on AI integration and strategic partnerships may provide avenues for future growth, while macroeconomic uncertainties and potential market share pressures remain key concerns for investors to monitor. With a market capitalization of $41.1 billion and a beta of 1.31, eBay maintains a solid financial position, supported by strong shareholder returns through dividends and share buybacks. This analysis is based on information available up to September 17, 2025.

Ready to dive deeper into eBay’s investment potential? InvestingPro subscribers get access to exclusive features including Fair Value estimates, financial health scores, and comprehensive Pro Research Reports. Use our advanced tools to compare eBay with peers and make more informed investment decisions. Check out our ProPicks platform for AI-driven investment recommendations and portfolio strategies.

InvestingPro: Smarter Decisions, Better Returns

Gain an edge in your investment decisions with InvestingPro’s in-depth analysis and exclusive insights on EBAY. Our Pro platform offers fair value estimates, performance predictions, and risk assessments, along with additional tips and expert analysis. Explore EBAY’s full potential at InvestingPro.

Should you invest in EBAY right now? Consider this first:

Investing.com’s ProPicks, an AI-driven service trusted by over 130,000 paying members globally, provides easy-to-follow model portfolios designed for wealth accumulation. Curious if EBAY is one of these AI-selected gems? Check out our ProPicks platform to find out and take your investment strategy to the next level.

To evaluate EBAY further, use InvestingPro’s Fair Value tool for a comprehensive valuation based on various factors. You can also see if EBAY appears on our undervalued or overvalued stock lists.

These tools provide a clearer picture of investment opportunities, enabling more informed decisions about where to allocate your funds.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.