Etsy (ETSY): Marketplace Turnaround Is Beginning to Show Results
Something changed at Etsy over the past few quarters, and we think the market is starting to notice.
For a while, investors questioned whether the online marketplace could return to sustainable growth. Recent results suggest the turnaround is gaining traction, with improving sales trends, stronger financial performance and growing engagement from both buyers and sellers.
The momentum starts with gross merchandise sales (GMS), one of the company’s most important performance metrics. Etsy has now delivered year-over-year GMS growth for three consecutive quarters. Even more encouraging, that growth has accelerated from just 0.1% in the fourth quarter of 2025 to 7.5% in the second quarter of 2026.
The company’s latest earnings report reinforced that progress.
Second-quarter revenue reached $668.3 million, comfortably ahead of the $646.1 million analysts had expected. Adjusted EBITDA came in at $195.3 million, also topping consensus estimates of $182.1 million.
Management also became more optimistic about the road ahead, raising its full-year outlook. The company now expects gross merchandise sales to increase by a mid-single-digit percentage rate for the year, an improvement over its previous forecast.
We believe several strategic initiatives are beginning to pay off. Etsy has invested in improving its search capabilities, mobile app and customer loyalty programs, all with the goal of attracting more buyers, increasing engagement and strengthening its seller ecosystem. Those efforts appear to be driving healthier marketplace fundamentals that could support more durable growth through the second half of this year and into 2027.
The stock trades around $86 per share after gaining roughly 48% year to date. Despite that strong performance, JPMorgan recently upgraded the shares to Overweight from Neutral and raised its price target to $100, implying approximately 22% upside from recent levels.
Interestingly, Wall Street remains relatively cautious. According to LSEG data, only 11 of the 31 analysts covering Etsy rate the stock as either Buy or Strong Buy, while 19 maintain Hold ratings. That leaves room for sentiment to improve if the company continues executing its turnaround.
With accelerating marketplace growth, stronger-than-expected earnings, improving guidance and initiatives that appear to be strengthening both buyer and seller engagement, we believe Etsy is becoming one of the more compelling turnaround stories in e-commerce today.
