eBay stock has outperformed the market due to its focus on collectibles, auto, and fashion, along with AI integration and expanding advertising. Despite a narrow economic moat, the stock is overvalued, trading 32% above the $62 fair value estimate. eBay faces risks like consumer health, evolving preferences, and competition. The company’s success hinges on platform improvement and focus categories.

With a narrow economic moat, eBay benefits from a growing network of buyers and sellers, generating revenue from various sources like listing fees and advertisements. The $62 fair value estimate implies a 13 times EV/EBITDA multiple for 2026. Revenue is expected to grow 7% in 2025 and 7%-9% during 2026-28, with AI enhancing consumer engagement.

However, eBay faces risks from consumer health, evolving preferences, and competition, which could impact sales growth and margins. The company’s exposure to nondiscretionary goods adds cyclical sensitivity. Execution risk and regulatory challenges in e-commerce add to uncertainties. The lack of proprietary logistics and first-party inventory may hinder market share growth.

Bulls believe eBay’s managed payments rollout and success in luxury resale offer growth opportunities. Bears are concerned about market share loss, slower growth in international markets, and competition from Amazon. The company’s ability to innovate and adapt will be crucial for future success.

Read more at Morningstar: EBay: Up More Than 30% in 2025, This Stock Is a Sell