Etsy (ETSY) Stock Forecast & Price Target

Etsy, a leading e-commerce marketplace, is projected to achieve a consolidated gross merchandise volume (GMS) of $12.5 billion in 2024, demonstrating its strong market position and growth prospects. The company has seen growth in gifting categories, with gifting GMS representing 29% of total GMS in 2024, and it anticipates a return to higher growth rates driven by increased advertising revenue and greater frequency of purchases. Additionally, Etsy's asset-light model is expected to create operating leverage, enhancing its margins as revenue growth accelerates in response to improved consumer spending and effective technology initiatives.

Etsy's EBITDA estimates have decreased by approximately 10% due to anticipated lower gross merchandise sales (GMS) and expectations of reduced margins year-over-year, driven by increased investment in product development without expected sales and marketing leverage in the upcoming year. The company's guidance indicates a year-over-year decline in GMS for the first quarter that aligns with the previous quarter's disappointing performance, largely attributed to pressures on consumer discretionary spending and a focus on long-term initiatives over immediate growth. Additionally, the number of active buyers decreased slightly year-over-year, while marketing strategy effectiveness has waned, leading to reduced brand strength and further contributing to negative outlook metrics for 2025.