ETSY Gets a Bullish Upgrade: What Investors Should Know

On September 15, Oppenheimer raised Etsy's stock rating from "Perform" to "Outperform" and set a price target of $90 per share. The firm highlighted artificial intelligence search benefits, product enhancements, and app engagement as key drivers. SimilarWeb data indicates that non-app buyers may remain flat year-over-year in Q3, while experiencing a 3% decline in Q2.

This suggests Etsy could reach the top of its gross merchandise sales (GMS) guidance. Etsy forecasts a 7.5% year-over-year increase in GMS for Q2 2026, with a similar projection for the second half of the year. However, the firm is cautious about app GMS growth, expecting no improvement despite product advancements. A survey of 2,500 US consumers supports Etsy's product performance improvements.

The $90 price target is based on 12 times Etsy's projected 2027 EBITDA, making it a 10% discount to eBay. The upgrade follows Etsy's Q2 2026 results, which showed a 7.5% year-over-year increase in GMS, marking the third consecutive quarter of growth. Etsy also announced a $2 billion share repurchase program and a restructuring plan cutting 220 employees, or 12%.

Hedge fund interest in Etsy has increased, with 51 funds holding positions as of August 31, up from 44 in Q1. Despite the upgrade, analysts question whether Etsy can maintain buyer growth, particularly as purchase frequency remains below last year's levels.