Analyst action
Stifel has trimmed its price target for Etsy Inc. (NASDAQ:ETSY) to $55 from $62 and retained a Hold rating, according to a note released Thursday. The firm said its revision reflects a reassessment of the company's near-term trajectory and the effect of a disposal of its Depop unit.
Fourth-quarter takeaways
Stifel characterized Etsy's fourth-quarter results as mixed. Gross merchandise sales and reported revenue did not meet the firm's expectations, while EBITDA and the count of active buyers exceeded estimates. Stifel noted the company's first-quarter guidance as an indicator of the path into 2026.
Depop sale and margin dynamics
The pending sale of Depop is expected to be margin-accretive. Stifel said the unit represented a 350 basis point drag on Etsy's EBITDA margins in 2025. Divesting Depop should let Etsy redirect investment toward its core product experience rather than allocating resources for Depop awareness efforts, according to the note.
InvestingPro data cited in the firm's note shows a last-twelve-month gross profit margin of 71.64% for Etsy, a figure Stifel used to underscore the company's underlying profitability despite recent operational headwinds. The InvestingPro analysis also indicated the stock was trading below the platform's calculated Fair Value, as reflected in its Pro Research Report covering ETSY and more than 1,400 U.S. equities.
Drivers of growth and estimate changes
Stifel said it expects Etsy to return to positive gross merchandise sales growth over the course of the year. The firm pointed to specific growth drivers in place: continued product work on the Etsy mobile app, where app GMS growth has accelerated by three percentage points year-over-year as a share of total GMS, and a reported uptick in gross buyer additions for the first time in two years. Those developments, along with the pending Depop divestiture, prompted Stifel to adjust its forecasts and lower its price target.
Other analyst activity and recent results
Etsy reported fourth-quarter 2025 earnings per share of $0.92, topping the consensus estimate of $0.85. The company posted a record quarterly revenue of $882 million, a figure that was slightly below the $884.14 million some analysts expected. Etsy's core Marketplace saw a modest year-over-year increase in gross merchandise sales, helped by favorable spending patterns in certain marketing channels, a point noted by Canaccord Genuity.
Analysts remain divided. Truist Securities raised its price target to $83, reflecting a more optimistic view of sustainable growth. Meanwhile, Canaccord Genuity and Needham moved their targets to $72 and $65, respectively, with Needham citing the Depop sale's effect on growth. Cantor Fitzgerald lowered its target to $51, kept a Neutral rating, and observed that Etsy's EBITDA exceeded prior street estimates by 4%. Stifel's move adds to a spectrum of views that point to a mixed near-term outlook for the business.
Outlook
Stifel's adjustments reflect expectations for improving margins following the Depop transaction and a gradual return to gross merchandise sales growth supported by app-led initiatives and renewed buyer additions. The range of analyst price targets and ratings highlights differing assessments of how quickly those improvements will translate into revenue and valuation gains.
Key points
- Stifel cut its price target on Etsy to $55 from $62 while maintaining a Hold rating.
- Q4 showed misses in gross merchandise sales and revenue but beats in EBITDA and active buyers; Q1 guidance was viewed as indicative of the 2026 trajectory.
- The pending Depop sale is expected to expand margins, given Depop was a 350 basis point drag on 2025 EBITDA.
Risks and uncertainties
- Revenue and GMS misses in the fourth quarter highlight potential near-term growth risk for Etsy and the broader e-commerce and online marketplace sectors.
- Impact of the Depop divestiture on future growth - some analysts, including Needham, see the sale as a headwind to growth prospects.
- Analyst divergence on valuation and earnings trajectory creates uncertainty for equity investors assessing Etsy's path to sustained improvement.