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Etsy Stock Upgraded to Outperform by Oppenheimer on AI and App Engagement
Oppenheimer has upgraded Etsy (ETSY) to Outperform from a previous Perform rating, establishing a $90 price target for the e-commerce marketplace. The investment bank's positive revision is based on encouraging data related to the company's AI-driven search enhancements, product improvements, and increased user engagement within its mobile app.
Rationale for the Upgrade
In a research note, Oppenheimer analyst Jason Helfstein pointed to third-party data and a proprietary consumer survey as support for a more optimistic outlook. The firm's analysis of SimilarWeb data suggests a stabilization in customer traffic.
- A regression analysis implies that non-app buyers were flat year-over-year in the third quarter, a notable improvement from a 3% decline in the second quarter.
- Oppenheimer noted this is the first non-negative quarter for the metric since approximately 2023, suggesting the high end of Etsy's gross merchandise sales (GMS) guidance is achievable.
A separate Oppenheimer survey of 2,500 U.S. consumers indicated healthy demand and strong brand loyalty. The survey found that 88% of users go directly to Etsy's website or app, bypassing search engines like Google. Helfstein wrote that this suggests product improvements are resonating with customers, giving Etsy "a strong competitive moat and less dependence on Google Search."
AdUpdated Forecasts and Valuation
Following its analysis, Oppenheimer has raised its 2026 GMS forecast for Etsy by 1%, aligning it with the high end of Wall Street consensus. The firm now projects 5% GMS growth for the company in both 2027 and 2028, even while assuming continued market share loss in the broader online handmade category.
The $90 price target is derived from a valuation of 12 times the firm's 2027 EBITDA estimate. Helfstein noted this represents a 10% discount to competitor eBay (EBAY), despite what he sees as similar growth profiles. Currently, Etsy trades at approximately 10 times Oppenheimer's 2027 EBITDA estimate, compared to 13 times for eBay.
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