Should Etsy's (ETSY) Earnings Dip and Buyback Shift Investor Perspectives on Future Growth?

• Etsy reported its second quarter 2025 results, showing US$672.66 million in sales, a slight increase over the prior year, but with net income dropping to US$28.84 million compared to US$53.01 million a year earlier.
• The company also completed a significant share buyback, reducing its outstanding shares by nearly 10% since October 2024, which may influence future per-share financial metrics and investor sentiment.
• We'll explore how Etsy's recent earnings decline, alongside the share buyback, impacts the company's long-term investment narrative and outlook.

Find companies with promising cash flow potential yet trading below their fair value.

Etsy Investment Narrative Recap

To be a shareholder in Etsy, you need to believe in the company’s ability to reignite buyer engagement and return gross merchandise sales (GMS) to consistent growth, despite ongoing declines in GMS and buyer activity. The latest earnings release shows incremental sales growth but a drop in net income, which does not meaningfully affect Etsy’s most important catalyst, growing buyer engagement via personalization, but it reinforces the biggest near-term risk: continued customer attrition and weaker demand. Among recent announcements, the nearly 10% reduction in outstanding shares through a major buyback since October 2024 stands out. While this move may help earnings per share metrics and could boost investor sentiment in the short term, it does little to address the underlying risk of declining platform activity, a challenge that remains central to Etsy’s longer-term outlook. In contrast, what investors should really watch is how falling active buyer counts could...

Read the full narrative on Etsy (it's free!)

Etsy's outlook anticipates $3.2 billion in revenue and $378.5 million in earnings by 2028. This scenario is built on a 3.8% annual revenue growth rate and a $214.5 million increase in earnings from the current $164.0 million.

Uncover how Etsy's forecasts yield a $63.96 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Seven Simply Wall St Community fair value estimates for Etsy span from US$63.96 to US$131.15 per share. As buyers reassess the company’s persistent GMS declines, expect strong differences in opinion and be sure to consider multiple viewpoints.

Explore 7 other fair value estimates on Etsy - why the stock might be worth over 2x more than the current price!

Build Your Own Etsy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Etsy research is our analysis highlighting 2 key rewards and 5 important warning signs that could impact your investment decision.
• Our free Etsy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Etsy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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