Etsy (ETSY) AI Stock Analysis

• Market Cap: $6.29B
• Dividend Yield: N/A
• Average Volume (3M): 5.39M
• Price to Earnings (P/E): 52.0
• Beta (1Y): 0.67
• Revenue Growth: 2.38%
• EPS Growth: -38.88%
• Country: US
• Employees: 2,400
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Specialty Retail
• EPS (TTM): 0.25
• Shares Outstanding: 99,108,570
• 10 Day Avg. Volume: 5,145,456
• 30 Day Avg. Volume: 5,392,341
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 2.73
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 14.71
• 1Y Price Target: $64.30
• Price Target Upside: 2.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 65 Neutral
• Price Target: $70.00 ▲(11.71% Upside)

Etsy's overall stock score reflects a mix of strengths and challenges. The company's strong cash flow and positive technical indicators are offset by valuation concerns and financial instability due to negative equity. Strategic initiatives highlighted in the earnings call show promise, but the declining buyer base and high P/E ratio remain significant risks.

Positive Factors

Market Competition

US e-commerce marketplaces should benefit from more favorable competitive dynamics as Asia-based retailers face higher operating costs.

Platform Initiatives

Etsy's Gross Merchandise Sales trends were well above expectations due to platform initiatives and increased brand marketing.

Product Improvements

ETSY is accelerating core GMS growth with idiosyncratic product improvements, assisted by reduced ad competitive intensity.

Negative Factors

Active Buyers Decline

Active buyers continue to decline, which may pose a challenge to Etsy's growth momentum.

Customer Acquisition Cost

Rising customer acquisition cost, which accelerated to 33% growth, is weighed against a flat year-over-year customer lifetime value, leading to rapidly falling LTV/CAC ratios.

De Minimis Trade Exemption

President Trump’s latest effort to end de minimis, if (operationally) enforceable, could present an added challenge to core ETSY GMS.

Etsy Business Overview & Revenue Model

Company Description

Etsy, Inc. operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides various seller tools, including Shop Manager dashboard, a centralized hub for Etsy sellers to track orders, manage inventory, view metrics and statistics, and have conversations with their customers; and Sell on Etsy, an application to enable enhanced onboarding and video uploading. Additionally, it offers Etsy seller analytics pages that provides insights regarding traffic acquisition for their shops; Targeted Offers, a sales and promotions tool, and social media tool; and accounting and bookkeeping services. The company also provides educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. As of December 31, 2021, it connected a total of 7.5 million active sellers to 96.3 million active buyers; and had 120 million items for sale. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

How the Company Makes Money

Etsy generates revenue through several key streams. The primary source is transaction fees, which are charged to sellers for each sale made through the platform. In addition, Etsy collects listing fees for each product a seller lists on the site. The company also earns revenue from advertising services, where sellers can pay for increased visibility of their listings through promoted listings. Furthermore, Etsy has introduced a subscription service, Etsy Plus, which offers sellers additional tools and features for a monthly fee. Significant partnerships, such as collaborations with shipping providers, also contribute to its earnings by enhancing the seller experience and streamlining logistics.

Etsy Financial Statement Overview

Summary

Etsy shows solid revenue growth and strong cash flow generation, indicating operational efficiency. However, declining profit margins and negative equity raise concerns about financial sustainability and leverage. The company should focus on improving profitability and stabilizing its balance sheet to mitigate potential risks.

Income Statement

Etsy shows a consistent revenue growth with a 3.7% increase in the latest TTM period. Gross profit margin remains robust at 72.2%, reflecting efficient cost management. However, the net profit margin has decreased to 7.35% from 10.8% last year, indicating some profitability challenges. EBIT margin is also lower at 10.43%, suggesting increased operational costs.

Balance Sheet

The balance sheet reflects a negative equity situation, with stockholders' equity at -$1.12 billion, indicating financial instability. The debt-to-equity ratio is not meaningful due to negative equity, but significant total liabilities highlight potential risk. ROE is not calculable due to negative equity, and the equity ratio is negative, further underlining balance sheet weaknesses.

Cash Flow

Etsy demonstrates strong cash flow generation with a 7.5% increase in free cash flow in the latest TTM period. The operating cash flow to net income ratio is high at 3.31, indicating robust cash generation relative to profits. However, the free cash flow to net income ratio has slightly decreased to 3.25, suggesting a need for careful monitoring.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.84B	2.81B	2.75B	2.57B	2.33B	1.73B
Gross Profit	2.05B	2.03B	1.92B	1.82B	1.67B	1.26B
EBITDA	527.45M	532.65M	398.19M	-551.11M	555.81M	465.92M
Net Income	164.02M	303.28M	307.57M	-694.29M	493.51M	349.25M
Balance Sheet
Total Assets	2.56B	2.42B	2.69B	2.63B	3.83B	2.40B
Cash, Cash Equivalents and Short-Term Investments	1.41B	1.04B	1.15B	1.17B	984.61M	1.67B
Total Debt	3.08B	2.39B	2.39B	2.39B	2.39B	1.12B
Total Liabilities	3.68B	3.18B	3.23B	3.18B	3.20B	1.66B
Stockholders Equity	-1.12B	-758.87M	-543.72M	-547.27M	628.62M	742.42M
Cash Flow
Free Cash Flow	678.95M	738.26M	665.61M	652.87M	623.38M	671.85M
Operating Cash Flow	689.70M	752.47M	705.51M	683.61M	651.55M	678.96M
Investing Cash Flow	30.19M	-53.10M	-73.31M	-30.02M	-1.56B	-11.38M
Financing Cash Flow	-326.83M	-787.17M	-656.53M	-506.48M	452.75M	119.28M

Etsy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETSY, the sentiment is Positive. The current price of 62.66 is above the 20-day moving average (MA) of 62.25, above the 50-day MA of 58.57, and above the 200-day MA of 53.19, indicating a bullish trend. The MACD of 1.66 indicates Positive momentum. The RSI at 51.94 is Neutral, neither overbought nor oversold. The STOCH value of 29.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ETSY.

Etsy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBAY	77 Outperform	$45.18B	21.85	42.63%	1.13%	3.05%	-10.82%
CHWY	72 Outperform	$17.00B	45.84	76.24%	―	7.64%	369.79%
ETSY	65 Neutral	$6.29B	51.95	-39.97%	―	2.38%	-38.88%
GLBE	65 Neutral	$5.35B	―	-3.18%	―	33.30%	74.42%
Sector *	64 Neutral	€7.52B	14.94	11.44%	3.41%	0.79%	-59.40%
TDUP	63 Neutral	$1.37B	―	-58.93%	―	-10.39%	14.92%
DIBS	50 Neutral	$95.33M	―	-19.50%	―	3.21%	-56.15%

Etsy Corporate Events

Etsy Stockholders Approve Key Proposals at Annual Meeting

At Etsy‘s 2025 Annual Meeting of Stockholders held on June 17, 2025, several key proposals were voted on. The election of Class I directors to the Board was confirmed, with directors set to serve until the 2028 meeting. Additionally, stockholders approved the compensation of named executive officers, ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and approved an amendment to Etsy’s certificate of incorporation.

Etsy Completes $700 Million Convertible Notes Offering

On June 16, 2025, Etsy completed a private offering of $700 million in 1.00% Convertible Senior Notes due 2030, aimed at institutional buyers. The proceeds, approximately $688.5 million after expenses, are intended for general corporate purposes, including debt repayment and stock repurchase. This move is part of Etsy’s strategic financial management, potentially impacting its market positioning and shareholder value.

Etsy Completes Sale of Reverb Holdings Subsidiary

On June 2, 2025, Etsy, Inc. completed the sale of its subsidiary, Reverb Holdings, Inc., a musical instrument marketplace, to Reverb IntermediateCo LLC. This transaction signifies a strategic move by Etsy to streamline its operations and focus more on its core business, potentially impacting its market positioning and stakeholder interests.