Etsy (ETSY) Stock Forecast & Price Target

Etsy has demonstrated solid growth metrics, with an estimated Paid Gross Merchandise Sales (GMS) rising approximately 8% year-over-year to about $2.9 billion in 2025. The company is also seeing positive momentum in its advertising revenue, which increased by $62.2 million, representing an 8-9% year-over-year rise, while total gross buyer additions reached 17.2 million, marking the first positive growth in this category since the third quarter of 2023. Additionally, Etsy's strong 1Q26 GMS guidance, projected between $2.38 billion and $2.43 billion, indicates a growth trajectory that exceeds market expectations, supporting a favorable outlook for the firm's financial future.

Etsy's financial outlook appears negative due to several underlying factors, including signs of a slowdown in gross merchandise sales (GMS), which experienced a minimal growth of only 0.1% despite surpassing estimates for zero growth. This stagnation is compounded by a decline in habitual buyers, which fell by 9% year-over-year, and the associated decrease in GMS from these buyers, leading to concerns about purchasing frequency and conversion rates. Additionally, while the company has relied on Depop for growth, it has become a margin drag, negatively impacting adjusted EBITDA, which has fluctuated between slightly below 28% and just over 30% in recent quarters.