Etsy's Modest Growth Amid Competitive Challenges and Emerging AI Impact: Bank of America Securities Maintains Hold Rating with $67 Price Target

Etsy's Q2 GMS and EBITDA are expected to exceed expectations, but growth remains modest due to competitive challenges and emerging AI impact. The company is making progress in AI shopping technology, but its impact is not yet substantial enough to drive significant growth. A Bank of America Securities analyst maintains a Hold rating with a $67.00 price target.

Etsy Inc. (ETSY, Financial) is anticipated to report quarterly gross merchandise sales (GMS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) that exceed market expectations for the second quarter of 2025. However, growth remains modest due to competitive challenges and the emerging impact of AI technology. The company's progress in AI shopping technology is noted, but its impact on driving significant growth is yet to be substantial.

According to a recent report by UBS analyst Chris Kuntarich, Etsy's price target has been increased from $45 to $62, reflecting a 70 basis points boost from foreign exchange benefits and a 5% increase in the growth rate of Core Etsy's gross merchandise sales over the previous year [1]. The analyst maintained a Neutral rating on the stock, indicating cautious optimism.

Etsy's app has seen a notable rise in monthly active users, with a 6% year-over-year increase in the second quarter. Additionally, U.S. sales experienced a 7% increase over a two-year period, indicating strong market performance [1]. However, the company reported a 6.5% year-over-year decline in consolidated GMS for Q1 2025, reflecting ongoing challenges in consumer discretionary spending [1].

Analysts from Bernstein raised their price targets for eBay and Etsy, with a $50 price target for Etsy, while reiterating a $235 price target and "top pick" designation for Amazon [2]. The analysts expect earnings momentum to continue, with the easing of tariff fears contributing to the positive outlook.

Despite these developments, Etsy faces macroeconomic headwinds, including potential impacts from global tariffs and changes to de minimis exemptions. The company is also experiencing some gross margin headwinds due to higher processing costs and investments in machine learning and search development.

A Bank of America Securities analyst maintains a Hold rating with a $67.00 price target, reflecting cautious optimism about Etsy's ability to navigate competitive challenges and capitalize on emerging AI technology [1].

References:
[1] https://www.gurufocus.com/news/2989594/etsy-etsy-price-target-increased-as-sales-show-promising-growth-etsy-stock-news
[2] https://www.ainvest.com/news/commerce-stocks-bounce-amazon-ebay-etsy-earnings-preview-2507/