Needham Reiterates Buy on Etsy, Raises PT to $72 from $55.

Needham Reiterates Buy on Etsy, Raises PT to $72 from $55.

In a recent update, Needham & Company, LLC reiterated its "Buy" rating on Etsy Inc. (NASDAQ: ETSY) and raised its price target to $72 from $55. The financial advisory firm made this decision following Etsy's second-quarter 2025 results, which exceeded analyst expectations [2].

Etsy reported gross merchandise sales (GMS) of $673 million, a 3.8% increase year-over-year, despite a 4.8% decline in GMS to $2.8 billion. The company's adjusted EBITDA margin for the quarter was 25.1%, and its take rate remained strong at 24% [2].

Needham highlighted several factors contributing to the positive outlook, including Etsy's strategic initiatives aimed at improving product discovery, leveraging machine learning, retaining valuable customers, and enhancing human connection on the platform [2]. The company's focus on artificial intelligence and personalization appears to be resonating with investors, as evidenced by the positive premarket stock movement following the Q2 results [2].

Additionally, Etsy's core Etsy marketplace saw trends improve throughout the quarter after a softer start impacted by Easter timing. The company's Depop marketplace demonstrated strong growth, particularly in the U.S. market, with GMS reaching $250 million, up 35.3% year-over-year [2].

Looking ahead, Etsy provided guidance for consolidated GMS between $2.6 billion and $2.7 billion for Q3 2025, with an expected take rate of approximately 24.5% and an adjusted EBITDA margin of around 25% [2]. The company maintains a strong financial position, with a cash balance of approximately $1.5 billion as of June 30, 2025, and generated $90 million in consolidated free cash flow during Q2 [2].

References:
[1] https://www.nasdaq.com/articles/why-etsy-stock-popped-today
[2] https://ng.investing.com/news/company-news/etsy-q2-2025-slides-revenue-grows-38-despite-gms-decline-stock-jumps-93CH-2033764