We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Etsy Stock Up 40% in the Past 3 Months: Should You Buy, Hold or Sell?
Read MoreHide Full Article
Key Takeaways
Etsy shares climbed 40.5% in three months as marketplace trends, app growth and AI investments improved.
Q1 marketplace GMS rose 5.5% to $2.5B, while active buyers returned to sequential growth after two years.
Etsy trades below industry and peer valuations, while technical indicators signal continued market strength.
Etsy, Inc. (ETSY - Free Report) has witnessed an impressive rally over the past three months as investors cheered signs of improving marketplace fundamentals and growing confidence in the company’s long-term strategy. The optimism has been supported by renewed growth in the core Etsy marketplace, improvements in customer behavior and engagement, accelerating mobile app momentum and continued investments in artificial intelligence.
However, after such a sharp run-up, investors face a more important question: has the recent optimism already been priced into the stock, or does Etsy still have room to deliver meaningful upside? While management remains confident about sustaining marketplace growth through better personalization, seller tools and product innovation, the company continues to face year-over-year declines in repeat and habitual buyers, while recent average order value tailwinds are also expected to moderate as the year progresses.
Closing yesterday’s trading session at $77.72, Etsy has surged 40.5% over the past three months compared with the industry’s flat performance. The stock also outperformed key competitors, with Amazon.com, Inc. (AMZN - Free Report) and eBay Inc. (EBAY - Free Report) advancing 2.6% and 19.5%, respectively, during the same period.
With Amazon and eBay continuing to compete for online shoppers and seller attention, Etsy must now demonstrate that its improving marketplace momentum can translate into stronger purchase frequency and durable buyer retention.
ETSY Past Three-Month Stock Performance
Image Source: Zacks Investment Research
Can Etsy Turn Momentum into Lasting Growth?
Etsy stands out as a differentiated e-commerce platform with a marketplace centered on unique, handcrafted, and personalized products that create meaningful connections between buyers and independent sellers. This distinctive positioning creates a durable competitive advantage, helping Etsy attract shoppers looking for products that are not easily available elsewhere. Management is now focused on strengthening this advantage by improving discovery, increasing personalization, and building deeper relationships with both buyers and sellers. Early signs suggest these initiatives are beginning to improve marketplace health.
During the first quarter of 2026, marketplace gross merchandise sales (GMS) increased 5.5% year over year to $2.5 billion, with the growth rate improving 540 basis points from the fourth quarter of 2025. Active buyers also returned to sequential growth for the first time in two years, indicating that the company’s strategic priorities are starting to influence customer behavior.
Etsy is growing investments in artificial intelligence and personalized shopping experiences. The company is redesigning its search and recommendation engines to better understand buyer preferences, shopping intent and the unique nature of its inventory. These improvements are making it easier for customers to discover relevant products while encouraging them to explore more categories and shopping occasions. Etsy is also enhancing its mobile app, where personalized recommendations, stronger customer engagement and direct communication channels are creating a richer shopping experience.
App GMS increased 11.2% year over year and represented about 47% of total marketplace GMS. Etsy is also expanding its presence in agentic commerce through partnerships with OpenAI, Microsoft and Google. Management highlighted encouraging early traffic and high-intent engagement from these integrations and recently developed an Etsy app for ChatGPT, reinforcing its strategy to capture AI-driven product discovery as the technology evolves.
Another compelling investment driver is Etsy's renewed focus on strengthening both sides of its marketplace. The company is investing in helping sellers manage their businesses through AI-powered tools that simplify shop management and product listings, allowing creators to spend more time designing new products and serving customers. During the first quarter, Etsy also developed a seller-focused AI Shop Assistant designed to provide actionable insights while reducing operational complexity. Active sellers increased 3.3% year over year to 5.6 million, marking the first period of seller growth since Etsy introduced its seller setup fee. Management believes these efforts will improve seller retention, strengthen inventory quality over time and enhance the buyer experience.
Etsy expects marketplace GMS to grow in every quarter of 2026 and guided low-single-digit growth for the full year. For the second quarter, management expects Etsy marketplace GMS of $2.48 billion to $2.53 billion, implying growth of 3% to 5%. The company remains focused on areas within its control, including accelerating product innovation, improving personalization, increasing marketing efficiency, and strengthening buyer and seller relationships.
Despite the encouraging operational progress, Etsy’s investment case is not devoid of risk. While active buyers improved sequentially, they were still down 2.1% year over year, with repeat buyers declining 3.2% to 34.6 million and habitual buyers falling 5.7% to 5.9 million, though management noted moderation in sequential declines. These cohorts are important because they support recurring demand and stronger purchase frequency. At the same time, first-quarter GMS benefited from temporary factors, including foreign exchange tailwinds, tariff-related seller price increases and higher average order values, all of which are expected to moderate through the remainder of 2026.
Can Etsy Stock Rally Continue?
While the fundamental story remains encouraging, the stock’s recent move also warrants a look at its technical setup. Momentum indicators can help investors assess whether Etsy’s rally is still supported by market strength, or if the stock may be approaching a pause after its sharp advance.
Etsy’s technical setup remains supportive, with the stock trading above its 50-day moving average of $68.12, signaling strong near-term momentum. ETSY is also trading above its 200-day moving average of $60.75, suggesting that the recent rally is backed by a broader uptrend rather than a short-lived spike.
Image Source: Zacks Investment Research
Is Etsy Stock Still Undervalued?
Etsy is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 13.24. This represents a meaningful discount to the broader industry average of 21.71 and remains fairly below the S&P 500’s forward multiple of 21.03. The stock is also trading below its one-year median P/E of 20.
Etsy is trading at a discount to Amazon (with a forward 12-month P/E ratio of 25.98) and eBay (18.35).
Image Source: Zacks Investment Research
How Are Etsy's Earnings Estimates Trending?
The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to $6.29 over the past 30 days.
Image Source: Zacks Investment Research
Should You Buy, Hold or Sell Etsy Stock?
Etsy has made meaningful progress in strengthening its marketplace through better personalization, AI-driven innovation and renewed seller engagement, all of which are beginning to improve operating trends. However, the company still needs to translate these early gains into sustained buyer retention and higher purchase frequency while navigating the normalization of recent growth tailwinds. Although the stock continues to appear reasonably valued and its technical setup remains constructive, recent estimate revisions suggest investors should remain measured in their expectations. Existing shareholders may consider holding the stock as management executes on its growth strategy, while prospective investors may benefit from waiting for clearer evidence of durable operating momentum or a more attractive entry point before building new positions.
View the Zacks #1 Rank List
Image: Bigstock
Etsy Stock Up 40% in the Past 3 Months: Should You Buy, Hold or Sell?
Key Takeaways
Etsy, Inc. (ETSY - Free Report) has witnessed an impressive rally over the past three months as investors cheered signs of improving marketplace fundamentals and growing confidence in the company’s long-term strategy. The optimism has been supported by renewed growth in the core Etsy marketplace, improvements in customer behavior and engagement, accelerating mobile app momentum and continued investments in artificial intelligence.
However, after such a sharp run-up, investors face a more important question: has the recent optimism already been priced into the stock, or does Etsy still have room to deliver meaningful upside? While management remains confident about sustaining marketplace growth through better personalization, seller tools and product innovation, the company continues to face year-over-year declines in repeat and habitual buyers, while recent average order value tailwinds are also expected to moderate as the year progresses.
Closing yesterday’s trading session at $77.72, Etsy has surged 40.5% over the past three months compared with the industry’s flat performance. The stock also outperformed key competitors, with Amazon.com, Inc. (AMZN - Free Report) and eBay Inc. (EBAY - Free Report) advancing 2.6% and 19.5%, respectively, during the same period.
With Amazon and eBay continuing to compete for online shoppers and seller attention, Etsy must now demonstrate that its improving marketplace momentum can translate into stronger purchase frequency and durable buyer retention.
ETSY Past Three-Month Stock Performance
Image Source: Zacks Investment Research
Can Etsy Turn Momentum into Lasting Growth?
Etsy stands out as a differentiated e-commerce platform with a marketplace centered on unique, handcrafted, and personalized products that create meaningful connections between buyers and independent sellers. This distinctive positioning creates a durable competitive advantage, helping Etsy attract shoppers looking for products that are not easily available elsewhere. Management is now focused on strengthening this advantage by improving discovery, increasing personalization, and building deeper relationships with both buyers and sellers. Early signs suggest these initiatives are beginning to improve marketplace health.
During the first quarter of 2026, marketplace gross merchandise sales (GMS) increased 5.5% year over year to $2.5 billion, with the growth rate improving 540 basis points from the fourth quarter of 2025. Active buyers also returned to sequential growth for the first time in two years, indicating that the company’s strategic priorities are starting to influence customer behavior.
Etsy is growing investments in artificial intelligence and personalized shopping experiences. The company is redesigning its search and recommendation engines to better understand buyer preferences, shopping intent and the unique nature of its inventory. These improvements are making it easier for customers to discover relevant products while encouraging them to explore more categories and shopping occasions. Etsy is also enhancing its mobile app, where personalized recommendations, stronger customer engagement and direct communication channels are creating a richer shopping experience.
App GMS increased 11.2% year over year and represented about 47% of total marketplace GMS. Etsy is also expanding its presence in agentic commerce through partnerships with OpenAI, Microsoft and Google. Management highlighted encouraging early traffic and high-intent engagement from these integrations and recently developed an Etsy app for ChatGPT, reinforcing its strategy to capture AI-driven product discovery as the technology evolves.
Another compelling investment driver is Etsy's renewed focus on strengthening both sides of its marketplace. The company is investing in helping sellers manage their businesses through AI-powered tools that simplify shop management and product listings, allowing creators to spend more time designing new products and serving customers. During the first quarter, Etsy also developed a seller-focused AI Shop Assistant designed to provide actionable insights while reducing operational complexity. Active sellers increased 3.3% year over year to 5.6 million, marking the first period of seller growth since Etsy introduced its seller setup fee. Management believes these efforts will improve seller retention, strengthen inventory quality over time and enhance the buyer experience.
Etsy expects marketplace GMS to grow in every quarter of 2026 and guided low-single-digit growth for the full year. For the second quarter, management expects Etsy marketplace GMS of $2.48 billion to $2.53 billion, implying growth of 3% to 5%. The company remains focused on areas within its control, including accelerating product innovation, improving personalization, increasing marketing efficiency, and strengthening buyer and seller relationships.
Despite the encouraging operational progress, Etsy’s investment case is not devoid of risk. While active buyers improved sequentially, they were still down 2.1% year over year, with repeat buyers declining 3.2% to 34.6 million and habitual buyers falling 5.7% to 5.9 million, though management noted moderation in sequential declines. These cohorts are important because they support recurring demand and stronger purchase frequency. At the same time, first-quarter GMS benefited from temporary factors, including foreign exchange tailwinds, tariff-related seller price increases and higher average order values, all of which are expected to moderate through the remainder of 2026.
Can Etsy Stock Rally Continue?
While the fundamental story remains encouraging, the stock’s recent move also warrants a look at its technical setup. Momentum indicators can help investors assess whether Etsy’s rally is still supported by market strength, or if the stock may be approaching a pause after its sharp advance.
Etsy’s technical setup remains supportive, with the stock trading above its 50-day moving average of $68.12, signaling strong near-term momentum. ETSY is also trading above its 200-day moving average of $60.75, suggesting that the recent rally is backed by a broader uptrend rather than a short-lived spike.
Image Source: Zacks Investment Research
Is Etsy Stock Still Undervalued?
Etsy is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 13.24. This represents a meaningful discount to the broader industry average of 21.71 and remains fairly below the S&P 500’s forward multiple of 21.03. The stock is also trading below its one-year median P/E of 20.
Etsy is trading at a discount to Amazon (with a forward 12-month P/E ratio of 25.98) and eBay (18.35).
Image Source: Zacks Investment Research
How Are Etsy's Earnings Estimates Trending?
The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to $6.29 over the past 30 days.
Image Source: Zacks Investment Research
Should You Buy, Hold or Sell Etsy Stock?
Etsy has made meaningful progress in strengthening its marketplace through better personalization, AI-driven innovation and renewed seller engagement, all of which are beginning to improve operating trends. However, the company still needs to translate these early gains into sustained buyer retention and higher purchase frequency while navigating the normalization of recent growth tailwinds. Although the stock continues to appear reasonably valued and its technical setup remains constructive, recent estimate revisions suggest investors should remain measured in their expectations. Existing shareholders may consider holding the stock as management executes on its growth strategy, while prospective investors may benefit from waiting for clearer evidence of durable operating momentum or a more attractive entry point before building new positions.
Etsy stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.