Etsy (ETSY) AI Stock Analysis

• Market Cap: $5.57B
• Dividend Yield: N/A
• Average Volume (3M): 6.45M
• Price to Earnings (P/E): 38.5
• Beta (1Y): 0.78
• Revenue Growth: 2.18%
• EPS Growth: -32.87%
• Country: US
• Employees: 2,400
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Specialty Retail
• EPS (TTM): -0.49
• Shares Outstanding: 104,282,260
• 10 Day Avg. Volume: 4,823,545
• 30 Day Avg. Volume: 6,454,511
• PEG Ratio: 0.09
• Price to Book (P/B): -27.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.26
• Enterprise Value/Market Cap: 2.99
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 8.19
• Enterprise Value/Ebitda: 8.25
• 1Y Price Target: $48.84
• Price Target Upside: -9.77% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 26

• Rating: 64 Neutral
• Price Target: $57.00 ▲(5.30%Upside)

Etsy's overall stock score reflects strong revenue growth and cash flow generation, which are key strengths. However, the high valuation, declining net profit margin, and negative equity position pose significant risks. Technical indicators and earnings call insights suggest mixed prospects, with macroeconomic pressures and consumer spending challenges impacting the outlook.

Positive Factors

Debt Management

Etsy's new convertible debt provides the company with an attractive means to refinance and extend debt maturities at relatively low cost and no incremental dilution to equity.

Market Sentiment

ETSY stock is up 32% from May 21, indicating a positive shift in market sentiment.

User Engagement

Global Daily Active User growth accelerated to 14% year over year, indicating strong engagement.

Negative Factors

Growth Outlook

There is a lack of conviction in a durable recovery for Etsy, with cautious expectations for continued Gross Merchandise Sales improvement.

Traffic and Growth

Traffic improvement has slowed, leading to cautious expectations for 3Q growth levels similar to 2Q.

Valuation Concerns

ETSY is not considered cheap on GAAP P/E, suggesting valuation concerns.

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 makes money primarily through transaction fees, listing fees, and payment processing fees charged to sellers using its platform. For each sale completed on the marketplace, Etsy charges a transaction fee, which is a percentage of the final sale price, including shipping costs. Sellers are also required to pay a small fee to list each item on the site, which encourages the creation of a diverse and continually updated inventory of products. Additionally, Etsy offers a range of optional services, such as Etsy Ads and Etsy Payments, which provide further monetization by charging fees for promoted listings and processing payments, respectively. The platform benefits from a vast network effect, where the presence of a large number of buyers attracts more sellers, and a wide variety of products attracts more buyers, thus continually driving growth and revenue. Etsy's partnerships with payment processors and logistics providers also enhance its service offerings, contributing to the company's earnings.

Etsy Financial Statement Overview

Summary

Etsy demonstrates strong operational management and cash flow generation, but faces challenges in profitability and high leverage. The company has a robust revenue growth yet struggles with negative equity and profitability declines.

Income Statement

Etsy has demonstrated consistent revenue growth over the years, with a notable increase from 2020 to 2025. However, the net profit margin has recently declined, primarily due to a significant drop in net income from 2021 onwards, suggesting challenges in maintaining profitability. Gross profit margins remain strong, indicating that Etsy successfully manages its core operations efficiently.

Balance Sheet

The balance sheet indicates a high level of leverage, with negative stockholders' equity, signaling potential risks related to financial stability. The debt-to-equity ratio is not calculable due to negative equity, but the high debt levels could pose a risk. Despite this, the company maintains a reasonable level of cash and cash equivalents, which provides some liquidity buffer.

Cash Flow

Etsy's cash flow position appears robust, with strong operating cash flows consistently exceeding net income, indicating good cash generation from operations. Free cash flow has grown over the period, showing effective cash management. However, fluctuations in financing cash flow suggest some instability in financial strategy.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.81B	2.81B	2.75B	2.57B	2.33B	1.73B
Gross Profit	2.03B	2.03B	1.92B	1.82B	1.67B	1.26B
EBITDA	544.38M	532.65M	398.19M	-551.11M	555.81M	465.92M
Net Income	188.18M	303.28M	307.57M	-694.29M	493.51M	349.25M
Balance Sheet
Total Assets	2.12B	2.42B	2.69B	2.63B	3.83B	2.40B
Cash, Cash Equivalents and Short-Term Investments	867.70M	1.04B	1.15B	1.17B	984.61M	1.67B
Total Debt	98.12M	2.39B	2.39B	2.39B	2.39B	1.12B
Total Liabilities	3.03B	3.18B	3.23B	3.18B	3.20B	1.66B
Stockholders Equity	-910.30M	-758.87M	-543.72M	-547.27M	628.62M	742.42M
Cash Flow
Free Cash Flow	718.45M	738.26M	665.61M	652.87M	623.38M	671.85M
Operating Cash Flow	732.62M	752.47M	705.51M	683.61M	651.55M	678.96M
Investing Cash Flow	-48.67M	-53.10M	-73.31M	-30.02M	-1.56B	-11.38M
Financing Cash Flow	-828.94M	-787.17M	-656.53M	-506.48M	452.75M	119.28M

Etsy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 54.13
• 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 54.13 is below the 20-day moving average (MA) of 54.45, above the 50-day MA of 51.90, and above the 200-day MA of 51.65, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 51.97 is Neutral, neither overbought nor oversold. The STOCH value of 78.69 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
ANF	79 Outperform	$4.23B	8.57	46.98%	―	12.54%	25.47%
URBN	79 Outperform	$6.33B	14.77	19.55%	―	8.38%	52.18%
M	72 Outperform	$3.38B	6.30	12.92%	5.82%	-3.77%	4607.98%
ETSY	64 Neutral	$5.57B	38.45	-39.97%	―	2.18%	-32.87%
Sector *	63 Neutral	$16.62B	10.98	-6.98%	2.96%	1.73%	-24.23%
JWN	60 Neutral	$4.12B	14.17	29.58%	3.08%	2.20%	120.00%
W	55 Neutral	$7.07B	―	17.86%	―	-0.89%	46.62%

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.

The most recent analyst rating on (ETSY) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Etsy stock, see the ETSY Stock Forecast page.

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.

The most recent analyst rating on (ETSY) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Etsy stock, see the ETSY Stock Forecast page.

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.

The most recent analyst rating on (ETSY) stock is a Hold with a $65.00 price target. To see the full list of analyst forecasts on Etsy stock, see the ETSY Stock Forecast page.

Etsy Agrees to Sell Reverb Holdings, Inc.

On April 21, 2025, Etsy announced its agreement to sell Reverb Holdings, Inc., a musical instrument marketplace, to Reverb IntermediateCo LLC, a subsidiary of Reverb Partners LLC. This decision aligns with Etsy’s strategy to concentrate on expanding its core marketplace and subsidiary Depop. The transaction is expected to close in the coming months, potentially impacting Etsy’s operational focus and market positioning by allowing it to streamline its business efforts.