Etsy (ETSY) Stock Forecast & Price Target

Etsy's strong performance indicators include an estimated paid gross merchandise sales (GMS) increase of approximately 8% year-over-year, reaching around $2.9 billion in 2025, alongside a rise in total gross buyer adds by 3% year-over-year to 17.2 million, which marks the first positive growth in this metric since the third quarter of 2023. The firm also demonstrated resilience in its advertising revenue, rising by $62.2 million and contributing about 7% of GMS, while total advertising expenditure increased by 9% year-over-year to $791 million, indicating effective customer acquisition strategies. Furthermore, for the first quarter of 2026, Etsy has projected GMS between $2.38 billion and $2.43 billion, reflecting a year-over-year growth of 2-4%, which exceeds market expectations and reinforces a positive outlook for the company.

Etsy's adjusted EBITDA margin has shown a decline, falling from over 30% in 4Q25 to just below 28% in 2Q25, indicating potential operational pressures. The company's growth in gross merchandise sales (GMS) was minimal at only +0.1%, highlighting concerns about slowing consumer demand, particularly as the number of habitual buyers decreased by 9% year-over-year. Additionally, while acquisitions like Depop contributed to slight GMS growth, they simultaneously exerted pressure on adjusted EBITDA margins, further complicating Etsy's financial outlook.