Truist Securities raised its price target on Etsy (NASDAQ:ETSY) to $83 from $80 and maintained a Buy rating, citing the company’s recent operating updates and strategic moves as validation for the tighter target. The broker highlighted Etsy’s fourth-quarter 2025 performance and its first-quarter 2026 outlook as signs that the marketplace is moving toward sustainable, positive gross merchandise sales growth.
According to Truist, Etsy’s core Marketplace gross merchandise sales - when excluding Depop - increased year-over-year, and the active buyer base expanded on a quarter-over-quarter basis. Management also announced a cash sale of Depop for $1.2 billion. Truist said the transaction should allow Etsy’s leadership to concentrate resources and management attention on core Etsy growth initiatives.
The analyst pointed to a series of product and marketing improvements as drivers of the observed momentum. Enhancements in search functionality, AI-powered discovery and recommendation systems, gains in marketing efficiency, and a renewed emphasis on app usage were cited as contributors to the ongoing operational progress.
On valuation, Truist reported that Etsy trades at 2.6 times enterprise value to revenue and 8.8 times enterprise value to adjusted EBITDA based on its fiscal 2026 estimates. The firm also noted that it adjusted its internal estimates and revised the price target partly to reflect the impact of the Depop sale.
Separately, InvestingPro data flags Etsy’s market price of $50.42 as appearing undervalued, placing the stock on the platform’s Most Undervalued list. The company’s reported gross profit margin of 71.6% and a GOOD financial health score were cited, along with mention of 11 additional InvestingPro tips that address share buybacks and cash flow strength.
In its fourth-quarter 2025 results, Etsy reported earnings per share of $0.92 versus an expected $0.85, and posted record quarterly revenue of $882 million, marginally below the $884.14 million that analysts had forecast. Despite that slight revenue shortfall, management said the core marketplace registered a small increase in gross merchandise sales, helped by favorable foreign exchange movements and consumer spending patterns.
Responses from other brokerages varied. Canaccord Genuity lowered its target to $72 while keeping a Buy rating. Needham set a $65 target and also retained a Buy rating, noting that the Depop sale could have a positive effect on future adjusted EBITDA. Cantor Fitzgerald trimmed its target to $51 and stayed at a Neutral rating, pointing to a slight decline in gross merchandise sales. These revisions reflect a range of viewpoints among analysts about Etsy’s near-term trajectory.
Key takeaways
- Truist raised its price target to $83 from $80 and maintained a Buy rating, citing Q4 2025 results and Q1 2026 outlook as evidence of progress toward sustainable GMS growth.
- Management sold Depop for $1.2 billion in cash, a move Truist says should sharpen focus on core Etsy initiatives; product and marketing improvements were highlighted as operational drivers.
- Analyst reactions are mixed - price targets now range from $51 to $83 among cited firms, reflecting differing assessments of revenue trends and EBITDA implications.
Risks and uncertainties
- Revenue volatility: Etsy posted record revenue but narrowly missed expectations, indicating sensitivity in top-line results that could affect investor sentiment.
- Gross merchandise sales variability: While core marketplace GMS rose slightly, some analysts noted declines, leaving future GMS trends uncertain.
- Analyst divergence on valuation and outlook: Differing price targets and ratings signal uncertainty in consensus around Etsy’s growth trajectory and the financial impact of the Depop sale.