Etsy (ETSY) Stock Forecast & Price Target

Etsy has demonstrated a solid financial performance with a revenue growth of 6.1% year-over-year, excluding the sale of Reverb, highlighting its resilience in a competitive market. In addition, the company achieved a remarkable 59% year-over-year growth in U.S. gross merchandise sales (GMS), alongside a notable increase in reactivated buyers, which reached 6.6 million, representing a 3.8% annual growth. The Depop subsidiary also significantly contributed to the overall strength, generating $292.1 million in GMS with a growth rate of 39.4% year-over-year, underscoring Etsy's expanding market presence and user engagement across its platforms.

Etsy has experienced a concerning decline in total active buyers for five consecutive quarters, with a year-over-year decrease of 4% to 93.2 million users, signaling potential customer retention issues. The company's margin from Depop has also declined sequentially as increased marketing expenditures aimed at driving growth in the U.S. are anticipated to negatively impact EBITDA estimates, which have been lowered by approximately 5%. Furthermore, Etsy's performance lags behind overall U.S. e-commerce growth, attributed to persistent weaknesses in key categories like home decor, coupled with a reliance on discretionary spending that may limit future consumer engagement.