Update shared on 10 Dec 2025
We are modestly lifting our Etsy price target by a mid single digit percentage to reflect analysts' higher Street targets, grounded in evidence that AI driven search, recommendations and marketing improvements are beginning to stabilize GMS trends, despite lingering margin and governance uncertainties.
Analyst Commentary
Street commentary around Etsy following Q3 results and the updated outlook reflects a mix of cautious optimism and lingering concern, with modestly higher price targets clustered in the mid 60s to low 80s range.
Bullish Takeaways
- Bullish analysts highlight that Q3 delivered a solid beat and that GMS declines are narrowing, supporting the view that growth can reaccelerate off a more stable base.
- Improved search quality, AI powered recommendations, and more efficient marketing are seen as key execution levers that can drive better conversion, higher app engagement, and ultimately support higher revenue growth and valuation multiples.
- The recent OpenAI and ChatGPT integrations, along with early traction in AI enabled merchandising, are viewed as positive for Etsy's long term structural positioning in e commerce and as a differentiator for its unique inventory.
- Some bullish analysts note that consolidated GMS, including Depop, is returning to positive year over year growth, which, if sustained, could justify further upside to current targets as confidence in the growth algorithm rebuilds.
Bearish Takeaways
- Bearish analysts emphasize that, despite better GMS trends, guidance still points to margin pressure and potential adjusted EBITDA contraction into 2026, limiting near term upside to valuation.
- The wide Q4 GMS range and disappointing margin guidance are seen as signs that key debates around sustainable growth and profitability remain unresolved, keeping some targets and ratings more neutral.
- Governance and leadership uncertainty, including the CEO transition and sensitivity around future fee increases, is viewed as a risk to execution, particularly if macro or tariff headwinds persist.
- There is concern that enthusiasm around new features like Instant Checkout and agentic commerce may be ahead of fundamentals, with some viewing recent share price spikes as overdone relative to the visibility on long term AI benefits.
What's in the News
- Kruti Patel Goyal, currently President and Chief Growth Officer, will succeed Josh Silverman as Chief Executive Officer effective January 1, 2026. This marks a planned leadership transition following Silverman’s departure on December 31, 2025 (Key Developments).
- Under Kruti Patel Goyal’s leadership, Depop’s gross merchandise sales and buyer base nearly doubled, and the platform was named to TIME's list of the 100 Most Influential Companies 2024. This reinforces investor focus on her marketplace execution track record ahead of the CEO handoff (Key Developments).
- From July 1, 2025 to September 30, 2025, Etsy repurchased 2,056,000 shares, or 2.06 percent of shares, for 119.82 million dollars. This completed a broader buyback of 12,123,260 shares, or 11.53 percent, totaling 643.18 million dollars under the October 30, 2024 authorization (Key Developments).
- Etsy has been removed from the Nasdaq Composite Index. This move may impact index fund ownership and trading liquidity, and adds to investor scrutiny around the company’s long term growth and valuation profile (Key Developments).
Valuation Changes
- Fair Value Estimate: Unchanged at 68.59 dollars per share, reflecting no revision to our core intrinsic value assessment.
- Discount Rate: Fallen slightly from 10.10 percent to 10.00 percent, indicating a modestly lower perceived risk profile or cost of capital.
- Revenue Growth: Essentially unchanged at approximately 4.89 percent, signaling a stable outlook for top line expansion.
- Net Profit Margin: Effectively flat at about 11.41 percent, suggesting no material change in long term profitability assumptions.
- Future P/E: Edged down slightly from 19.25x to 19.19x, implying a marginally lower valuation multiple on forward earnings.
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