Etsy Stock Price Forecast - ETSY Stock Drops to $66.39 After $75.77 High as NYSE Listing and OpenAI Integration Fuel Wild Swings

Etsy (NASDAQ:ETSY) Stock Swings Between $75 Highs and $66 Selloff Amid NYSE Switch, AI Push, and Buyer Attrition

ETSY’s Volatile Trading Week and YTD Outperformance

The past week highlighted just how volatile Etsy (NASDAQ:ETSY) has become. Shares surged nearly 16% in one session, closing at $74.34 on September 29 after touching an intraday peak of $75.77, only to tumble 10.7% the following day, finishing at $66.39. Despite this whiplash, ETSY stock remains up 25.5% year-to-date, comfortably ahead of the S&P 500’s 13.7% gain. The swings reflect both excitement around Etsy’s partnership with OpenAI and skepticism about the company’s ability to reignite its shrinking marketplace.

Marketplace Strain: Shrinking Buyer Base and Seller Attrition

Beneath the surface, Etsy continues to battle structural headwinds in its core marketplace. In Q2 2025, gross merchandise sales (GMS) slid 4.8% year-over-year to $2.8 billion. The decline was broad: active buyers fell 4.6%, repeat buyers declined 4.7%, and new buyers collapsed 14.5%. Perhaps more alarming, the seller base contracted by 18% as higher take rates and fees squeezed shop owners. These figures show that while Etsy can still attract traffic, engagement is eroding, and sellers are increasingly disillusioned by rising platform costs.

Depop as a Growth Driver in Recommerce

One bright spot is Depop, Etsy’s resale-focused subsidiary. In Q2, Depop’s GMS grew over 35%, led by the U.S., where resale fashion has been one of the fastest-growing consumer categories. This strength shows Etsy’s potential in the circular economy, but scale remains an issue. At $2.8 billion consolidated GMS, Depop’s contribution is meaningful but not large enough to offset the core platform’s weaknesses. Management is betting on AI-driven personalization and improved app experiences to replicate Depop’s momentum and increase purchase frequency across the broader ecosystem.

Revenue Growth Through Monetization and Rising Fees

While engagement metrics falter, Etsy has leaned heavily on monetization to drive revenue growth. Q2 2025 revenue rose 3.8% year-over-year to $672.7 million, even as GMS declined. The driver was an increase in the take rate to 24.0%, up from 22.0% a year ago. Seller services, particularly advertising, grew 15%, while marketplace revenue shrank. This strategy supports top-line growth but risks eroding seller loyalty further. Sellers already face thinner margins due to higher fees, forcing price increases that can hurt competitiveness.

Margins, Cash Flow, and Share Repurchases

Despite top-line stagnation, ETSY remains profitable. Adjusted EBITDA came in at $169 million in Q2, with a margin of 25%. Net income reached $164 million over the trailing twelve months, translating to EPS of $1.43. Etsy holds $1.41 billion in cash and generated $594.7 million in levered free cash flow. This liquidity underpins the company’s aggressive share repurchase program, which has supported EPS growth despite slowing revenue. However, marketing expenses have surged from 28.3% to 31.5% of revenue, compressing margins as Etsy spends heavily to re-engage buyers.

NYSE Transfer and OpenAI Partnership as Catalysts

Two recent announcements jolted ETSY stock. First, Etsy confirmed it will transfer its listing from Nasdaq to the NYSE on October 13, seeking greater institutional visibility. With the NYSE hosting $31 trillion in market cap compared to Nasdaq’s $29 trillion, the move could broaden investor access and improve liquidity. Second, Etsy unveiled a partnership with OpenAI, making it the first platform to integrate “instant checkout” inside ChatGPT. With ChatGPT claiming 700 million weekly active users, the integration could lift conversion rates by making Etsy purchases frictionless. Still, analysts warn the long-term impact is uncertain, since OpenAI is not altering search rankings—limiting the potential upside.

Valuation, Analyst Targets, and Market Sentiment

At $66.39, Etsy holds a market capitalization of $6.58 billion and trades at 22.5x forward earnings, down sharply from a trailing P/E of 51.7x. Revenue for 2025 is expected at $2.84 billion, inching only to $2.89 billion in 2026, with projected growth of just 1–2%. EPS, however, is forecast to climb 11.5% in 2025 and 18.3% in 2026, thanks to efficiency gains and buybacks. Analyst price targets span from $48 to $86, with a consensus of $65.46—almost exactly where the stock trades now. Short interest remains high at 28.3% of float, or 19.7 million shares, underscoring skepticism. Institutional ownership exceeds 133%, reflecting heavy derivative exposure, while insiders hold just 1.17% of shares. Insider activity and transactions can be tracked here.

Investment Outlook for NASDAQ:ETSY

The case for ETSY rests on whether management can stabilize buyers and sellers while leveraging Depop and AI-driven personalization to unlock new growth. The NYSE transfer and OpenAI deal provide near-term catalysts, but structural challenges remain. With shares bouncing between $40.05 and $75.77 over the past 12 months, the stock reflects both opportunity and risk. At $66, Etsy is neither expensive nor cheap—valued attractively on earnings but stretched on sales multiples. Given high short interest, thin revenue growth, and execution risks, the most balanced stance today is Hold, with speculative upside should its new initiatives succeed.

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