eBay's Q4 Momentum Meets Customs Risk Reality

What happened

eBay is showing renewed operational strength with Q4 2025 earnings and GMV outperformance, particularly in the U.S., and double-digit advertising revenue growth, as highlighted in a recent Seeking Alpha article. This aligns with the DeepValue report's findings that focus categories like collectibles and auto parts are driving 10-15% GMV growth and high-margin ads are a key lever. However, the report underscores looming structural risks from U.S. and EU customs changes in 2026, which could materially damage international GMV—49% of revenue—and challenge growth assumptions. Despite the positive near-term momentum, eBay's stock at around $91 is already priced for mid-single-digit growth, offering limited upside if these policy headwinds intensify. Therefore, while execution is solid, the broader investment thesis remains clouded by uncertain external pressures.

Implication

The strong Q4 performance validates eBay's strategic focus on enthusiast categories and advertising, supporting near-term earnings and cash flow for continued buybacks. However, impending customs changes threaten to weaken international GMV, a critical revenue stream, potentially leading to lower growth and margin compression. Current valuation at 19x trailing EPS prices in steady performance, leaving little cushion for downside if policy impacts materialize as feared. Capital returns via buybacks remain a support, but could be scaled back if free cash flow deteriorates under pressure. Investors should await clearer evidence from 2026 guidance and early data on how well domestic growth and ad monetization can counterbalance these headwinds before committing new capital.

Thesis delta

The news article confirms the positive aspects of eBay's execution in focus categories and advertising, which were already acknowledged in the DeepValue report. However, it does not shift the core thesis that customs risks pose a material threat to international GMV and limit upside at current valuations. Thus, the 'WAIT' rating and emphasis on monitoring policy impacts remain unchanged, with no compelling reason to alter the risk-reward assessment.