Bernstein analyst Nikhil Devnani maintained a Hold rating on Etsy yesterday and set a price target of $60.00.
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Nikhil Devnani’s rating is based on several factors influencing Etsy’s current and future performance. The recent management change, with Kruti Patel Goyal set to become CEO, suggests continuity in strategy but raises questions about potential growth investments in the coming years. While the partnership with OpenAI is seen as a positive step for attracting high-intent traffic, it has not yet been monetized, and there are concerns about the impact on onsite ads, which are crucial for profitability.
Moreover, although there are signs of growth in Etsy’s Gross Merchandise Sales (GMS), particularly with Depop’s impressive performance, the core Etsy GMS has shown only modest improvement. The guidance for Q4 suggests a slight increase, but the overall margin forecast has been adjusted downwards due to anticipated marketing investments. These mixed signals, along with a maintained price target of $60, underpin the Hold rating, reflecting a cautious outlook on Etsy’s ability to achieve significant growth in the near term.
Devnani covers the Consumer Cyclical sector, focusing on stocks such as Maplebear, DoorDash, and eBay. According to TipRanks, Devnani has an average return of 20.5% and a 69.01% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $62.00 price target.