Etsy (ETSY) AI Stock Analysis

• Market Cap: $5.28B
• Dividend Yield: N/A
• Average Volume (3M): 4.22M
• Price to Earnings (P/E): 40.4
• Beta (1Y): 0.81
• Revenue Growth: 1.98%
• EPS Growth: -20.98%
• Country: US
• Employees: 2,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.92
• Shares Outstanding: 96,247,180
• 10 Day Avg. Volume: 5,323,169
• 30 Day Avg. Volume: 4,218,606
• PEG Ratio: -0.92
• Price to Book (P/B): -4.96
• Price to Sales (P/S): 1.89
• P/FCF Ratio: 8.03
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 2.49
• Enterprise Value/Gross Profit: 3.47
• Enterprise Value/Ebitda: 15.06
• 1Y Price Target: $62.53
• Price Target Upside: 13.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): 3.02
• Revenue Forecast (FY): $2.76B

• Rating: 55 Neutral
• Price Target: $53.00 ▼(-3.43% Downside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is primarily driven by strong, stable cash generation and solid profitability, but is held back by balance-sheet risk (negative equity) and weak technical momentum. A relatively high P/E with no dividend and cautious growth guidance further limit upside despite strategic simplification from the planned Depop sale.

Positive Factors

Durable Free Cash Flow

Consistent, high free cash flow in the $650M–$750M range with near‑one-to-one conversion from net income provides durable internal funding for buybacks, debt reduction, and targeted product investment. This cash generation cushions the business against cyclical revenue softness and supports long-term capital allocation flexibility.

High Gross Margins & Profitability

Sustained ~70% gross margins and mid-high adjusted EBITDA margins in the marketplace indicate structural unit economics and pricing power. Strong margin profile supports reinvestment in product, marketing, and personalization while preserving cash generation even if top-line growth is modest, underpinning long-term profitability.

Depop Divestiture Frees Capital & Focus

The $1.2B Depop sale is a structural change: it removes a lower-margin, cash‑consuming asset, frees material cash for buybacks or reinvestment, and lets management reallocate resources to the core marketplace. Over months, this simplifies strategy, improves consolidated margins, and enhances capital allocation optionality.

Negative Factors

Negative Shareholders' Equity

A multi-year negative equity position constrains financial flexibility and increases vulnerability to adverse shocks. Even with falling debt, the negative equity base can complicate covenant calculations, limit borrowing capacity, and raise refinancing risk, making balance sheet repair a structural priority for durable stability.

Sluggish Top-Line Growth

Persistently low single-digit revenue and GMS growth suggest constrained market expansion or seller/buyer dynamics limiting scale. When growth is structural rather than cyclical, the company must rely on margin expansion or buybacks for returns, reducing operating leverage and making long-term EPS growth dependent on execution improvements.

Retention and Frequency Weakness

Declines in habitual buyers and purchase frequency weaken lifetime value and raise required acquisition spend. These retention gaps are structural issues affecting unit economics and recurring GMV, meaning durable recovery requires sustained product, loyalty, and marketplace improvements over multiple quarters to restore durable growth.

Etsy Business Overview & Revenue Model

Company Description

Etsy, Inc. operates online marketplaces that match third‑party sellers with buyers globally, with its main platform focused on unique and creative goods and its Depop brand focused on fashion resale. The company generates revenue primarily from marketplace fees (including listing, transaction, and payment processing fees), advertising services, and optional seller tools such as shipping labels. It also administers programs related to search placement, order protection on qualifying transactions, and fee incentives tied to seller‑driven traffic. Etsy was founded in 2005, incorporated as Indieco, Inc. in 2006, renamed Etsy, Inc. in June 2006, and is headquartered in Brooklyn, New York.

How the Company Makes Money

Etsy generates revenue primarily through transaction fees, listing fees, and payment processing fees. Sellers are charged a listing fee for each item they post on the platform, and Etsy takes a percentage of each sale made, known as the transaction fee. Additionally, Etsy provides optional advertising services for sellers, where they can pay to promote their listings on the platform. The company also earns money from payment processing fees when transactions are completed through Etsy Payments. Significant partnerships with shipping providers enhance its shipping capabilities, which can indirectly contribute to revenue by improving seller satisfaction and retention.

Etsy Financial Statement Overview

Summary

Strong and consistent free cash flow generation (operating/FCF ~$650M–$750M) and solid profitability with ~70%+ gross margins support the score. However, growth is sluggish (low-single-digit revenue growth) and the capital structure is a notable risk with negative equity and still-material debt, limiting financial flexibility.

Income Statement

Revenue has been essentially flat recently (about 2% growth in 2024 and ~1% in 2025), but profitability remains solid with consistently strong gross margins (~70%+). Net margins recovered well after the 2022 loss, staying positive in 2023–2025 (~11% range), though operating profitability has stepped down from 2024 to 2025 (lower EBIT/EBITDA margins), suggesting some renewed cost pressure or reduced operating leverage.

Balance Sheet

The balance sheet is the key weakness: stockholders’ equity is negative from 2022–2025, which reduces financial flexibility and makes leverage metrics less meaningful/less favorable despite debt coming down sharply in 2025. Total debt is still material (~$742M in 2025), and the negative equity position raises risk if operating performance weakens or if refinancing conditions tighten.

Cash Flow

Cash generation is a major strength. Operating cash flow and free cash flow are consistently high and stable (~$650M–$750M range), with free cash flow tracking close to net income (roughly 0.94–0.99x across years), indicating good earnings quality. Free cash flow growth was particularly strong in 2025, supporting reinvestment capacity and potential debt reduction, although the cash flow coverage of obligations was weaker in 2025 versus 2024.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.88B	2.81B	2.75B	2.57B	2.33B
Gross Profit	2.07B	2.03B	1.92B	1.82B	1.67B
EBITDA	333.07M	532.65M	398.19M	-551.11M	555.81M
Net Income	162.98M	303.28M	307.57M	-694.29M	493.51M
Balance Sheet
Total Assets	2.83B	2.42B	2.69B	2.63B	3.83B
Cash, Cash Equivalents and Short-Term Investments	1.62B	1.04B	1.15B	1.17B	984.61M
Total Debt	742.49M	2.39B	2.39B	2.39B	2.39B
Total Liabilities	3.93B	3.18B	3.23B	3.18B	3.20B
Stockholders Equity	-1.10B	-758.87M	-543.72M	-547.27M	628.62M
Cash Flow
Free Cash Flow	678.03M	738.26M	665.61M	652.87M	623.38M
Operating Cash Flow	693.41M	752.47M	705.51M	683.61M	651.55M
Investing Cash Flow	32.08M	-53.10M	-73.31M	-30.02M	-1.56B
Financing Cash Flow	-169.88M	-787.17M	-656.53M	-506.48M	452.75M

Etsy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 54.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETSY, the sentiment is Neutral. The current price of 54.88 is above the 20-day moving average (MA) of 51.64, below the 50-day MA of 55.64, and below the 200-day MA of 58.39, indicating a neutral trend. The MACD of -0.82 indicates Negative momentum. The RSI at 53.75 is Neutral, neither overbought nor oversold. The STOCH value of 90.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ETSY.

Etsy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GLBE	73 Outperform	$5.93B	91.71	7.48%	―	31.57%	―
EBAY	63 Neutral	$40.71B	20.94	40.85%	1.38%	4.89%	17.30%
CHWY	63 Neutral	$11.38B	56.62	59.58%	―	9.80%	-46.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	55 Neutral	$5.28B	40.44	―	―	1.98%	-20.98%
TDUP	51 Neutral	$610.69M	-15.68	-35.37%	―	-4.90%	50.77%
DIBS	47 Neutral	$176.12M	-12.64	-17.73%	―	3.49%	-16.10%

Etsy Corporate Events

Etsy Divests Depop to Refocus on Core Marketplace

On February 15, 2026, Etsy agreed to sell its U.K.-based subsidiary Depop, a fast-growing, mobile-first C2C fashion resale marketplace with about $1 billion in 2025 GMS and a predominantly Gen Z and Millennial user base, to eBay for roughly $1.2 billion in cash, subject to customary adjustments. The deal, unanimously approved by both boards and expected to close in the second quarter of 2026 pending regulatory clearance and other closing conditions, strengthens eBay’s position in recommerce and youth fashion while allowing Etsy to redeploy proceeds toward its core marketplace, including share repurchases and growth investments, with termination fees of up to $160 million underscoring the parties’ commitment to completion.

Etsy’s sale of Depop underscores a strategic refocus on its core marketplace, emphasizing sustainable growth and capital returns for shareholders. For eBay, integrating Depop’s highly engaged younger community and secondhand fashion inventory is set to deepen its C2C fashion offering, expand cross-listing and visibility for sellers, and potentially reshape competition in the global resale and circular fashion market, provided regulatory approvals are secured on schedule.

The most recent analyst rating on (ETSY) stock is a Hold with a $63.00 price target. To see the full list of analyst forecasts on Etsy stock, see the ETSY Stock Forecast page.

Etsy Expands Share Buybacks Amid Governance and Leadership Shift

On December 16, 2025, Etsy’s board amended and restated the company’s bylaws to tighten and clarify procedures and disclosure rules for shareholder director nominations in line with U.S. securities regulations, and to refine governance around shareholder and board meetings. That same day, the board approved a new share repurchase authorization of up to $750 million of common stock, with no expiration date and flexibility in execution methods, bolstering Etsy’s capacity for buybacks to nearly $1 billion when combined with remaining authorization under an existing program and signaling confidence in the company’s cash generation and growth strategy. Also on December 16, 2025, the board named current chair Fred Wilson as Lead Independent Director effective January 1, 2026, coinciding with a leadership transition in which Kruti Patel Goyal becomes chief executive and Josh Silverman moves to executive chair, a move presented as strengthening corporate governance and continuity as Etsy enters its next phase of growth.

The most recent analyst rating on (ETSY) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Etsy stock, see the ETSY Stock Forecast page.