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Investing.com - Stifel has reduced its price target on Etsy (NASDAQ:ETSY) to $64.00 from $66.00 while maintaining a Hold rating on the e-commerce platform’s shares. Currently trading at $61.98, InvestingPro analysis suggests the stock is undervalued, despite its relatively high P/E ratio of 37.6x.
The adjustment follows Etsy’s second-quarter performance, which Stifel characterized as "solid" despite lighter active customer numbers. The company’s third-quarter guidance presented mixed signals, with better revenue projections but lighter expectations for gross merchandise sales (GMS) and EBITDA. The company maintains impressive gross profit margins of 72.3% and has shown modest revenue growth of 2.18% over the last twelve months. Discover more insights about Etsy’s financial health, rated as "GREAT" by InvestingPro, along with 13 additional ProTips available for subscribers.
Stifel highlighted Etsy’s progress with its revamped mobile application, noting that monthly active users grew 7% year-over-year. The Etsy App now accounts for approximately half of the company’s GMS and outpaced non-App GMS growth, with personalization efforts helping to maintain stable quarter-over-quarter buyer trends. The company’s strong liquidity position, with a current ratio of 2.14, supports its ongoing technological investments.
At Etsy’s Depop marketplace, GMS continued strong growth at 35% year-over-year, with accelerated upper-funnel marketing efforts expected to drive continued adoption, though potentially compressing margins in the near term.
While Stifel expressed encouragement about Etsy’s execution in the current macroeconomic environment, the firm noted that the suspension of de minimis exemptions adds "a bit of risk to consumer behavior" in the second half of 2025 and beyond.
In other recent news, Etsy reported its second-quarter 2025 earnings, revealing a mixed performance. The company exceeded revenue forecasts, posting $672.7 million against the anticipated $646.86 million, though its earnings per share (EPS) of $0.25 fell short of the expected $0.48. Despite this mixed result, Canaccord Genuity raised its price target for Etsy to $76, maintaining a Buy rating, due to better-than-anticipated gross merchandise sales (GMS), revenue, and profitability figures. The e-commerce platform showed a sequential improvement with consolidated GMS declining approximately 5% year-over-year, while GMS excluding Reverb decreased just 2.6%.
Additionally, BTIG also raised its price target for Etsy to $72 from $58, maintaining a Buy rating. This decision was influenced by Etsy’s report of improving GMS trends as the quarter progressed, along with a positive third-quarter outlook. Both Canaccord Genuity and BTIG’s upgrades reflect confidence in Etsy’s ability to navigate challenging consumer spending conditions. These developments highlight key movements in Etsy’s financial landscape and analyst perspectives.
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