eBay Inc.

Moat drivers and weights: Network effects 40% weight, score 70. Liquidity and unique secondhand/enthusiast inventory attract buyers and sellers, reinforced by advertising tools that improve visibility. Still, sellers can multi‑home to Amazon, Etsy, Poshmark, Mercari or Vinted, so the network effect is real but not impregnable.

Intangible assets 20% weight, score 70. eBay’s brand is synonymous with recommerce and trust features like Authenticity Guarantee across sneakers, handbags, watches, jewelry, trading cards and more strengthen the value proposition.

Switching costs 20% weight, score 45. Tools, reputation, and feedback histories create some friction, but sellers can list elsewhere and buyers can comparison‑shop via search or social.

Cost advantages 10% weight, score 50. The marketplace model scales with relatively low capital, but logistics are mostly partner‑based, limiting structural cost overmatch.

Efficient scale 10% weight, score 55. In high‑value niches (collectibles, luxury, motors parts), reputation and authentication create credible deterrents, but category competitors exist.

Weighted result ≈62/100. Key durability risks include: evolving retail media economics and ad effectiveness, AI‑driven changes to product discovery, and regulatory obligations (EU DSA) that add costs and operational burden.

Evidence of pricing power: take rate ≈14 percent on 2025 GMV with ad revenue reaching 2.6 percent of GMV in Q4 (first‑party ads up 19 percent) suggests growing monetization levers beyond core transaction fees. eBay has latitude to raise ad take through product and policy changes, including broader attribution windows introduced in 2026. Countervailing forces: multi‑homing sellers curb fee increases, UK removal of private‑seller fees shifts monetization to buyer‑side protection fees and ads, and seller sentiment indicates sensitivity to higher ad costs.

Net: moderate pricing power largely via retail media and payments, with policy levers but real competitive and elasticity constraints.

The model is transaction‑based but diversified across geographies and categories, with ad revenue adding a quasi‑recurring layer tied to marketplace traffic. 2025 delivered $11.1 billion revenue, $79.6 billion GMV, 20.5 percent GAAP operating margin and $1.5 billion free cash flow; active buyers were stable to slightly up at 135 million.

Q1 2026 guidance implies continued double‑digit FX‑neutral growth in revenue and GMV. Risks to predictability include macro sensitivity in discretionary categories, competitive share shifts, and evolving search/ad ecosystems. Overall growth now appears mid‑single‑digit with reasonable visibility, supported by focus categories and retail media.

Balance sheet is solid with year‑end 2025 cash and non‑equity investments of $4.8 billion versus total debt of $6.75 billion, implying net debt of roughly $1.95 billion.

Free cash flow from continuing operations was about $1.5 billion in 2025 (CFO ≈ $2.0 billion, capex ≈ $0.5 billion) and interest paid was $256 million, indicating ample coverage and the ability to de‑lever quickly if needed. eBay opportunistically issued $1.0 billion of notes in November 2025 while repaying commercial paper and 2025 maturities, maintaining flexibility.

Dividend growth and buybacks are funded from internal cash generation.

Management prioritizes high‑return reinvestment in marketplace, payments, and ads; then returns excess cash via buybacks and a growing dividend. In 2025 eBay repurchased $2.5 billion of stock and paid $531 million in dividends; in February 2026 the dividend was raised to $0.31 and repurchases were topped up by $2.0 billion.

Bolt‑on M&A focuses on C2C/fashion and enthusiast verticals: Tise in 2025 and a definitive agreement to buy Depop for $1.2 billion in 2026. Execution risks include integration and cultural fit, plus labor relations noise from the 2022 TCGplayer deal. Overall, capital deployment has been disciplined and accretive to per‑share value.

CEO Jamie Iannone’s strategy since 2020 sharpened eBay’s focus on high‑value categories, authentication, and retail media, which now contributes meaningfully to monetization. CFO Peggy Alford (appointed May 2025) emphasizes operating discipline, AI‑enabled product velocity, and shareholder returns.

Governance is conventional rather than founder‑led, so alignment comes from sustained buybacks/dividends and measured M&A rather than owner control. We view the team as competent operators with clear priorities and credible execution, while noting regulatory complexity and seller relations as ongoing management tests.