Etsy stock price target raised to $76 from $72 at Needham on OpenAI deal

Investing.com - Needham raised its price target on Etsy (NASDAQ:ETSY) to $76.00 from $72.00 on Thursday, while maintaining a Buy rating on the e-commerce platform’s stock. This comes despite the stock experiencing a significant 11.74% decline over the past week, according to InvestingPro data.

The research firm cited Etsy’s recent OpenAI partnership as a positive factor for the company’s structural positioning, leading to the higher target multiple.

Needham noted that the narrowing of Gross Merchandise Sales (GMS) contraction is occurring faster than anticipated, with the firm now modeling low-single-digit consolidated proforma growth in 2026, resulting in upward estimate revisions of approximately 6%. InvestingPro data shows Etsy maintains impressive gross profit margins of 72.2%, though it trades at a relatively high P/E ratio of 50.

Despite the positive GMS trajectory, Needham expects continued investment in the Depop brand through the first half of 2026, which is projected to reduce adjusted EBITDA estimates by about 5%, resulting in roughly flat adjusted EBITDA for 2026.

The firm maintained its Buy rating on Etsy shares, expressing confidence in the company’s strategic positioning as e-commerce evolves with AI driving unique inventory, while cautioning that near-term brand marketing investments could weigh on the stock. According to InvestingPro’s Fair Value assessment, Etsy appears undervalued at current levels, with 10+ additional ProTips and a comprehensive Research Report available for subscribers.

In other recent news, Etsy reported better-than-expected third-quarter results, with gross merchandise sales (GMS) of $2.73 billion, revenue of $678 million, and EBITDA of $172 million, surpassing Street estimates by 2%, 3%, and 5% respectively. Despite these solid earnings, Evercore ISI downgraded Etsy from Outperform to In Line, although it slightly raised the price target to $73.00. In contrast, Canaccord Genuity and Truist Securities both raised their price targets to $80.00, maintaining Buy ratings, highlighting Etsy’s positive growth signs and improvements in its marketplace and Depop platform. Morgan Stanley also increased its price target to $65.00, noting the accelerating growth with a smaller year-over-year decline in core GMS. Goldman Sachs, while maintaining a Sell rating, raised its price target to $57.00, acknowledging Etsy’s third-quarter GMS exceeding expectations. These developments reflect varied analyst perspectives, with price target adjustments reflecting confidence in Etsy’s strategic improvements and growth potential.

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