Etsy stock forecast: Can the share price rebound to $250?
Etsy (ETSY) is an e-commerce service, offering a global marketplace for ‘unique and creative goods’. Its Depop, Reverb, Elo7 and Etsy.com platforms allow merchants to sell their products, manage inventory and build customer relationships.
As the pandemic shuttered stores, Etsy acquired millions of new and reactivated buyers – sending its share price soaring to a record high in November 2021. Yet with the end of the pandemic beckoning, the Etsy share price has plummeted, currently sitting at less than 50% of its November peak.
Can Etsy recover lost ground? We take a look at the latest Etsy share price forecast.
Etsy stock analysis
First, a look at the Etsy historical stock price. Between March 2017 and the onset of the coronavirus pandemic, the Etsy share price saw huge growth, increasing from around $12 in March 2017 to approximately $58 by March 2020.
Although this represented a surge of 383.33%, these gains would soon be dwarfed by the share price movements that followed.
As the implications of the coronavirus pandemic became clear, the Etsy share price initially plummeted, falling by almost 50% between 2 and 16 March 2020. But as shops were closed by pandemic restrictions, customers began to move online, heralding a bumper year for Etsy. Between 16 March 2020 and 8 February 2021, the Etsy share price rose to $232.70 – an increase of over 608%.
In May 2021, Etsy released results for the first quarter of 2021. Despite strong revenue and profit figures, Etsy CEO Josh Silverman commented that he expected to see growth decelerate. The stock’s value plummeted from an opening price of $188.45 on 5 May to a closing price of $157.68 the following day – a drop of over 16%.
In June 2021, Etsy stock news was dominated by announcements that it would acquire the global fashion marketplaces Depop and Elo7, and the share price gained almost 25% over the course of the month.
The Etsy share price grew again in autumn 2021, buoyed by third-quarter results released on 3 November. These gave the Etsy share price momentum to reach a record high of $296.91 on 24 November.
In more technical analysis, the relative strength index (RSI) for Etsy exceeded 70 on 4, 9 and 16 November 2021, signalling that the stock was overbought and due a price pullback.
But since then, the Etsy share price has tumbled, currently sitting at $145.16, less than 50% of its record peak, at the time of writing (15 February 2022). Its November gains were initially impacted by wider market turmoil attributed to surging Omicron cases and concerns about interest rate hikes.
More recently, Etsy stock has been impacted by a broader selloff of so-called ‘stay-at-home’ stocks as hopes for the end of the pandemic rise.
According to TradingView, the RSI for Etsy was neutral at 42.80 as of the time of writing, signalling that the stock was not due a price correction.
Results update
Etsy announced third-quarter earnings on 3 November 2021. Earnings per share (EPS) of $0.62 exceeded analyst expectations of $0.50, and revenues increased 17.9% year-on-year to $532.4m (£392.18m).
Etsy added approximately seven million new buyers over the quarter, which represented a slowdown in the level of new buyer growth. Etsy reported net income of $89.9m, down 2% year-over-year, which it attributed to acquisition-related expenses including the acquisitions of Depop and Elo7.
“Last year, Etsy dramatically outperformed e-commerce industry benchmarks, and now, in 2021, we’re lapping that performance with flying colours, reinforcing the significant market share gains we have made,” said Josh Silverman, Etsy, Inc. CEO in the results release.
Etsy’s latest results are due for release on 24 February – but will fourth-quarter figures be able to keep pace?
House of brands
Since 2019, Etsy has expanded to offer four marketplaces – Etsy, Reverb, Depop and Elo7. All of these platforms share the same capital-light marketplace model and Etsy hopes that this will trigger a flywheel effect.
Under this flywheel, buyers would approach one platform to purchase goods, increasing sales. These higher sales would then attract more sellers, who would make more revenue, enabling them to invest more in their buyer experience, thus attracting more customers.
Snowball effect?
And there is no doubt that the global pandemic provided the ideal environment for this flywheel growth. John Huber, managing partner of Saber Capital Management, summed it up as follows:
“Covid-19 accelerated two key trends that benefit Etsy: e-commerce adoption – buy side – and individual entrepreneurship – sell side.”
Against this favourable backdrop, Etsy reported record full year 2020 results, with 128.7% year-on-year revenue growth and a 76.7% increase in active sellers. Yet can the flywheel keep up momentum?
“Etsy is a snowball rolling downhill; it gets stronger as it grows, and is almost certain to grow for a long time.” - John Huber, managing partner of Saber Capital Management
Analysts at Zacks were bullish, stating in a February 2022 report that: “The coronavirus pandemic has been favouring the global e-commerce industry significantly over the past few months primarily due to social distancing protocol, stay-at-home restriction and the rising fear of coming into contact with this highly contagious virus…
“We believe that the change in consumer preference and behaviour toward online shopping will continue to drive Etsy’s top-line growth,” Zacks added.
Huber agreed, stating in an investor presentation that “Etsy is a snowball rolling downhill; it gets stronger as it grows, and is almost certain to grow for a long time”.
Headwinds
The big question remains whether shoppers will continue to buy online as the pandemic recedes. Deloitte’s 2022 Retail Industry Outlook report is bullish, finding that even though customers are more comfortable returning to stores, “their preference for online channels remains higher than before the pandemic”.
There could be more storm clouds looming on the horizon. In a February 2022 report, Zacks analysts identified “intensifying competition in the e-commerce industry, escalating expenses, strict government regulations and seasonality” as “major headwinds for Etsy”.
ETSY stock forecast for 2022
According to data from MarketBeat, analysts rated Etsy a consensus ‘buy’, based on 19 analyst ratings.
As of 15 February, the stock had 15 ‘buy’ ratings, four ‘hold’ ratings and zero ‘sell’. Analyst price targets ranged from a low of $154 to a high of $320, with the average sitting at $240.28 – a 67.28% upside on the current share price.
Following the third-quarter results release, analysts at Evercore, Citigroup and Wedbush all boosted their Etsy price targets and maintained positive ‘buy’/’outperform’ ratings on the stock.
More recently, however, analysts have taken a more bearish view, with nine analysts lowering their Etsy price targets since the start of 2022. The most significant price target reduction came from analysts at Oppenheimer: their revised Etsy share price projection of $225 represented a 21% drop, but still maintained a 41.25% upside on the report date share price.
February 2022 also saw UBS reduce its Etsy stock price target from $215 to $180 (still a 18.3% upside on the report date share price), although it did upgrade its rating from ‘sell’ to ‘neutral’. On 10 February, Truist Financial also lowered its Etsy price target from $274 to $230, but reiterated a positive ‘buy’ rating.
It’s worth noting that analyst predictions are frequently wrong, and forecasts are no substitute for your own research. Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
Etsy (ETSY) stock forecast: Looking ahead to 2030
Looking to the longer term, algorithm-based forecasting service WalletInvestor rated Etsy an “awesome long term investment” at the time of writing (15 February).
According to WalletInvestor’s algorithmic Etsy stock price predictions, the share price was forecast to grow over the coming 12 months, hitting $217.34 by February 2023.
WalletInvestor’s forecasts then saw the share price reaching $302.89 by February 2024, $389.20 by February 2025, and $474.09 by February 2026.
According to WalletInvestor’s forecast for the next five years, the share price will top $500 in May 2026, reaching $559.08 by February 2027.
Note that algorithm-based projections can be inaccurate as they are based on past performance, which is no guarantee of future results.
Forecasts should never be used as a substitute for your own research. Once again, always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
FAQs
Is Etsy a good stock to buy?
According to data from MarketBeat, Etsy was currently (15 February) rated a consensus ‘buy’ by analysts. Etsy stock has 15 ‘buy’ ratings, four ‘hold’ ratings and zero ‘sell’ ratings.
If you are considering investing in Etsy, it’s worth noting that analyst predictions are frequently wrong, and forecasts are no substitute for your own research. Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
Will Etsy stock go up or down?
Data from MarketBeat reported an analyst price target consensus of $240.28 for Etsy stock – a 68.44% upside on the current (15 February) share price.
Longer term algorithmic forecasts from WalletInvestor saw the Etsy share price hitting $217.34 by February 2023, and reaching $559.08 by February 2027.
It’s worth noting that price predictions are frequently wrong, and forecasts are no substitute for your own research. Note that algorithm-based projections can be inaccurate as they are based on past performance, which is no guarantee of future results.
Always perform your own due diligence before investing, and never invest or trade money you can’t afford to lose.
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