Etsy Stock Hitting New 52-Week Highs: Time for a Purchase?
Etsy, the popular online marketplace, has released its Q2 2025 financial results, showing a mixed performance that has left analysts with a cautiously optimistic outlook for the short term and a moderately positive view for the long term.
The company's gross merchandise sales (GMS) declined 4.8% year-over-year to $2.8 billion, or 2.6% excluding Reverb, which was sold during the quarter. However, Etsy's quarterly revenue topped expectations, reaching $672.7 million. The Q2 margin of Adjusted EBITDA was 25.1%, while Adjusted EBITDA decreased 5.8% to $169 million. Etsy's Q2 earnings per share (EPS) fell 39% annually to $0.25, largely due to a foreign exchange loss.
Despite these results, Etsy's stock surged to a fresh 52-week high of $68.45 on July 30 and has risen 40% over the past three months. The stock is currently trading at a premium to its average analyst price target of $58.04.
In the short term, analysts expect positive GMS growth in Q3 2025, which has prompted some analysts to raise their price targets. For instance, Cantor Fitzgerald increased its target to $64, and Needham raised it to $72. Truist also raised its price target from $60 to $70, maintaining a Buy rating, reflecting optimism amid the positive growth prospects.
For the long term, analyst consensus shows a "Hold" rating with an average price target around $56.64, implying a slight expected decrease of about 3.6%. Revenue forecasts show modest average annual growth around 0.9%-5.7% from 2025 to 2029, while EPS forecasts vary widely but show potential for substantial growth in some scenarios.
Etsy's active sellers fell to 8.1 million, while buyers dropped to 93.3 million. However, the company reactivated 6.5 million buyers and brought in 4.8 million new ones. Etsy also bought back $335 million worth of stock, or 6.4 million shares, during the quarter.
Despite the recent pullback, with Etsy's stock closing at $61.98 on July 30, the overall analyst outlook for Etsy's stock growth remains mixed but cautiously optimistic in the short term and moderately positive long term. Analysts expect Etsy's Q3 EPS to surge by 42% year-over-year to $0.64. Etsy's stock trades at 22 times forward earnings and 2.3 times sales, indicating a premium valuation.
- In light of the recent financial results, some analysts have raised their price targets for Etsy, suggesting that the company's investing in technology might bring positive GMS growth in Q3 2025, as seen with Truist raising its target to $70.
- By buying back $335 million worth of stock and reactivating 6.5 million buyers, Etsy demonstrates its commitment to finance and long-term growth, aligning with the moderately positive view analysts have for the company in the long term.
