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On Thursday, Cantor Fitzgerald adjusted its outlook on Etsy stock (NASDAQ:ETSY), reducing its price target from $46.00 to $43.00 while maintaining a Neutral rating. Currently trading at $51.97, InvestingPro analysis suggests the stock is undervalued. The firm’s analysts pointed out that Etsy’s fourth-quarter Gross Merchandise Sales (GMS) fell short of Wall Street’s expectations by 3%, though its EBITDA of $488.28M surpassed estimates by 2%, supported by an impressive gross profit margin of 72.42%.
Etsy’s guidance for the first quarter indicates a year-over-year decline in GMS, which is expected to be roughly consistent with the fourth quarter’s performance. With annual revenue of $2.81B and a P/E ratio of 24.11, the company anticipates improvement in both top-line revenue and profitability in the second half of the year. Despite this outlook, Cantor Fitzgerald expressed concerns over the near-term prospects for Etsy, citing "plenty of uncertainties" regarding the company’s fundamental outlook for the year 2025.
The firm emphasized that Etsy’s GMS growth continues to be challenged by various macroeconomic and company-specific factors. Additionally, the impact of product initiatives on the platform appears to be minimal in the early stages. Cantor Fitzgerald’s analysts have chosen to maintain a cautious stance, opting to wait for signs of stability on Etsy’s platform before altering their rating.
In their statement, Cantor Fitzgerald reiterated their Neutral stance, emphasizing the decision to lower the 12-month price target to $43. This adjustment reflects the firm’s assessment of the risks and uncertainties surrounding Etsy’s performance and the potential for growth amidst a competitive and changing market environment.
In other recent news, Etsy has faced a series of adjustments to its financial outlook following its fourth-quarter earnings report. Guggenheim maintained a Buy rating but lowered its price target to $70 due to a 3% shortfall in Gross Merchandise Sales (GMS), although Etsy’s take rate and cost of revenue leverage showed improvement. Loop Capital also revised its price target downward to $40, maintaining a Sell rating, citing ongoing declines in GMS and a lack of clear reversal indicators. Raymond (NSE:RYMD) James adjusted its price target to $60 while keeping an Outperform rating, acknowledging the shortfall in GMS and revenue but highlighting Etsy’s favorable risk/reward profile.
Goldman Sachs reiterated a Sell rating with a $45 price target, noting a nearly 7% year-over-year decline in consolidated GMS and emphasizing the challenges Etsy faces in a competitive e-commerce market. Stifel reduced its price target to $51, maintaining a Hold rating, and highlighted that despite missed expectations in GMS and revenue, Etsy’s EBITDA margins exceeded forecasts. The company anticipates a stronger second half of 2025, with management shifting focus back to near-term GMS growth. Meanwhile, Etsy’s Depop platform showed accelerated GMS growth, contrasting with the broader challenges faced by the company. These developments reflect the various perspectives of financial analysts on Etsy’s current performance and future prospects.
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