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Etsy, Inc. (ETSY) Stock

Etsy, Inc. Stock Details, Movements and Public Alerts

Etsy Inc (ETSY): The $7B Handmade Marketplace Battling Amazon's Shadow

CEO Josh Silverman inherited Etsy in 2017 as a money-losing marketplace with declining relevance. Eight years later, he's built a profitable niche e-commerce platform serving consumers seeking alternatives to Amazon's algorithmic sameness. Etsy's 90+ million buyers visit specifically for handmade jewelry, vintage clothing, craft supplies, and personalized gifts unavailable elsewhere. The model works: 75% gross margins, 27% EBITDA margins, and $600M+ annual free cash flow from a platform connecting independent artisans with intentional shoppers. However, the pandemic boom reversed brutally—GMS (gross merchandise sales) peaked at $13.3B (2021) and declined to $12.6B (2024), while the stock collapsed 75% from highs. At $54 (14x forward earnings), ETSY prices in continued struggle: Amazon Handmade and Temu compete aggressively, discretionary craft purchases decline in inflation-stressed budgets, and seller satisfaction drops on fee increases. Silverman's turnaround thesis requires reaccelerating GMS growth—a challenge in saturated e-commerce markets.

52-Week Range

$76.52 - $40.05

-30.80% from high · +32.21% from low

Avg Daily Volume

2,745,135

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

36.14

Above market average

Forward P/E

19.96

Earnings expected to grow

PEG Ratio

2.39

Potentially overvalued

Price to Book

21.42

EV/EBITDA

17.09

EPS (TTM)

$1.48

Price to Sales

1.86

Beta

1.76

More volatile than market

How is ETSY valued relative to its earnings and growth?
Etsy, Inc. trades at a P/E ratio of 36.14, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 19.96 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 2.39 indicates a premium valuation even accounting for growth.
What is ETSY's risk profile compared to the market?
With a beta of 1.76, Etsy, Inc. is significantly more volatile than the market. For every 10% market move, this stock tends to move 18% in the same direction. Higher beta stocks offer greater potential returns but with increased risk. The price-to-book ratio of 21.42 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

6.38%

Operating Margin

12.20%

EBITDA

$446.30M

Return on Equity

-1224.00%

Return on Assets

9.66%

Revenue Growth (YoY)

2.40%

Earnings Growth (YoY)

39.90%

How profitable and efficient is ETSY's business model?
Etsy, Inc. achieves a profit margin of 6.38%, meaning it retains $6.38 from every $100 in revenue after all expenses. This relatively low margin suggests the company operates in a competitive environment or high-cost industry where profitability is challenging. The operating margin of 12.20% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at -1224.00% and ROA at 9.66%, the company achieves moderate returns on invested capital.
What are ETSY's recent growth trends?
Etsy, Inc.'s revenue grew by 2.40% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 39.90% year-over-year, outpacing revenue growth through improved margins. These growth metrics should be evaluated against INTERNET RETAIL industry averages for proper context.

Company Size & Market

Market Cap

$5.3B

Revenue (TTM)

$2.85B

Revenue/Share (TTM)

$27.07

Shares Outstanding

98.71M

Book Value/Share

-$11.29

Asset Type

Common Stock

What is ETSY's market capitalization and position?
Etsy, Inc. has a market capitalization of $5.3B, classifying it as a mid-cap stock ($2B-$10B). Mid-caps often represent companies in their growth phase, offering higher growth potential than large-caps but with more stability than small-caps. They can be attractive takeover targets and may become tomorrow's large-caps. With 98.71M shares outstanding, the company's ownership is relatively concentrated. As a participant in the INTERNET RETAIL industry, it competes with other firms in this sector.
How does ETSY's price compare to its book value?
Etsy, Inc.'s book value per share is -$11.29, while the current stock price is $52.95, resulting in a price-to-book (P/B) ratio of -4.69. Trading below book value can indicate the market perceives challenges ahead, or it might represent a value opportunity if the assets are quality and earnings can recover. Value investors often screen for P/B ratios below 1.0. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$68.59

29.54% upside potential

Analyst Recommendations

Strong Buy

3

Buy

5

Hold

22

Sell

2

Strong Sell

0

How reliable are analyst predictions for ETSY?
32 analysts cover ETSY with 25% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The bearish sentiment could create opportunity if analysts are wrong. The consensus target of $68.59 implies 29.5% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on ETSY?
Current analyst recommendations:3 Strong Buy, 5 Buy, 22 Hold, 2 Sell, 0The neutral stance suggests uncertainty or fair valuation at current levels.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Dec 13, 2025, 08:26 AM

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Etsy Inc (ETSY) Stock Analysis 2025: Complete Investment Guide

From IPO Disappointment to Pandemic Darling to...Now What?

Etsy's journey mirrors the broader e-commerce narrative compressed into a decade. IPO'd in 2015 at $16/share amid skepticism about profitability, the company floundered until Josh Silverman (former eBay executive) became CEO in 2017 and implemented 'Structured Creativity'—product improvements, search optimization, and seller fee increases that doubled take rates from 3.5% to 7%+. When COVID-19 locked consumers home, Etsy exploded: GMS surged from $5B (2019) to $13.3B (2021), the stock hit $300, and the company became the poster child for stay-at-home commerce. Then reality returned. GMS declined 5% annually (2022-2024), active buyers dropped from 96M to 90M, and the stock collapsed to $40—an 87% drawdown. Today's Etsy at $54 (14x forward earnings) reflects Wall Street's skepticism that Silverman can reignite growth against Amazon Handmade, Temu's $10 crafts, and consumer fatigue with pandemic hobbies.

Business Model & Competitive Moat

Etsy's moat is curation and community. Unlike Amazon's endless SKU optimization, Etsy attracts shoppers specifically seeking one-of-a-kind items: custom wedding invitations, handmade jewelry, vintage band t-shirts, personalized pet portraits. The 7+ million sellers (mostly individual artisans) create inventory impossible to replicate algorithmically. Platform economics are exceptional: 75% gross margins (marketplaces don't hold inventory), 27% EBITDA margins, and capital-light operations generating $600M+ annual free cash flow. Revenue comes from transaction fees (6.5% of sale), payment processing (3%+ spread), advertising (Etsy Ads), and subscription services (Etsy Plus). However, seller resentment grows as take rates exceed 12% all-in—driving migration to Shopify stores and social media selling.

Financial Performance

  • •Revenue: $2.8B (2024), 3% growth; GMS $12.6B declining 2% annually
  • •Profitability: 75% gross margin, 27% EBITDA margin; best-in-class for marketplaces
  • •Free Cash Flow: $600M+ annually (21% FCF margin); funds buybacks despite growth challenges
  • •Balance Sheet: $1.1B cash, $2.4B convertible debt; net debt position but manageable
  • •Shareholder Returns: $800M buybacks (2024); reducing share count 5%+ annually

Growth Catalysts

  • •International Expansion: Non-U.S. now 45% of GMS; Germany, UK, France growing 10%+ annually
  • •Advertising Revenue: Etsy Ads underpenetrated vs. Amazon/eBay; 2x seller ad spend feasible by 2027
  • •AI Product Discovery: Machine learning improving search relevance; personalization drives conversion 15-20%
  • •Gift Economy Focus: 'Gifting' positioning for occasions (birthdays, weddings, holidays) protects from discretionary cuts
  • •Depop/Reverb Integration: Acquired marketplaces (fashion resale, musical instruments) cross-selling potential

Risks & Challenges

  • •Amazon Handmade Competition: Amazon's handmade category growing 20%+ annually with Prime shipping advantage
  • •Temu/Shein Disruption: Ultra-cheap goods compete for 'unique/affordable' gifting purchases
  • •Seller Exodus: 12%+ take rate driving artisans to Shopify, social selling; seller satisfaction declining
  • •Consumer Discretionary Pressure: Handmade goods are first-cut items in recession budgets
  • •Pandemic Comparison Lap: $13.3B GMS (2021) makes any growth look underwhelming for years

Competitive Landscape

Etsy's direct competitors include Amazon Handmade (unlimited resources, Prime shipping), eBay (collectibles/vintage overlap), and new entrants Temu and Shein disrupting affordable gift categories. Indirect competition from Shopify (sellers building own stores) and social commerce (Instagram/TikTok shops) fragments the market further. Etsy's advantage remains buyer intent: shoppers visit Etsy specifically for unique items, accepting longer shipping and higher prices. Amazon Handmade struggles with discoverability (lost among 350M products), while Temu's disposable goods lack the 'story' driving Etsy purchases. Josh Silverman's challenge is maintaining differentiation as every platform adds 'handmade' and 'unique' categories—Etsy must prove its 90M-buyer community is defensible versus trillion-dollar competitors.

Who Is This Stock Suitable For?

Perfect For

  • ✓Contrarian investors believing pandemic-era buyer habits return at scale
  • ✓Value seekers (14x P/E with 75% gross margins) accepting turnaround risk
  • ✓E-commerce thematic players wanting non-Amazon exposure
  • ✓Cash flow investors (21% FCF margin funding aggressive buybacks)

Less Suitable For

  • ✗Growth investors requiring 15%+ annual revenue expansion
  • ✗Risk-averse investors uncomfortable with competition from Amazon/Temu
  • ✗Momentum traders (stock in extended downtrend since 2021)
  • ✗ESG investors (seller fee criticism, gig economy concerns)

Investment Thesis

Etsy's 14x forward P/E reflects deep skepticism that Josh Silverman can reverse GMS declines against intensifying competition. The bear case is compelling: Amazon Handmade and Temu compete for gift purchases, seller satisfaction declines on fee increases, and pandemic-era crafting enthusiasm faded. However, the bull case hinges on Etsy's irreplaceable market position: 90M buyers visit specifically for handmade/vintage goods unavailable elsewhere, 7M sellers create unique inventory impossible to replicate, and 75% gross margins generate $600M+ free cash flow for buybacks and product investment.

The stock is a turnaround bet on e-commerce differentiation. If Silverman reaccelerates GMS growth (international expansion, advertising monetization, AI discovery), the 14x P/E re-rates to 20-25x ($75-95 target, 40-75% upside). If GMS continues declining, cash flow still supports the current valuation—but returns flatten. At $54, Etsy offers asymmetric risk/reward for patient investors: limited downside given FCF support, significant upside if growth returns. Not suitable for portfolios requiring consistent appreciation.

Conclusion

Etsy is a HOLD/SPECULATIVE BUY for patient investors accepting turnaround risk. The 14x P/E and $600M+ FCF provide valuation support, while 75% gross margins and 90M-buyer community represent defensible assets. However, growth must return for upside—current trajectory warrants caution. Size positions appropriately for competition risk from Amazon and Temu; suitable for contrarian portfolios with 2-3 year horizons.
Bull Case
$85 (57% upside) - GMS growth returns to 5%+, international accelerates, multiple re-rates to 22x
Base Case
$62 (15% upside) - Flat GMS, stable margins, buybacks support valuation
Bear Case
$38 (30% downside) - GMS declines 5%+ annually, competition intensifies, multiple compresses to 10x

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