Jul. 16 at 12:53 PM
BTIG downgraded Etsy to Neutral from Buy after the stock's strong rally pushed shares above the firm's previous
$78 price target, leaving the risk-reward profile more balanced. Etsy shares are up 55% year-to-date and have significantly outperformed the broader e-commerce sector, supported by solid sales trends and the
$1.2 billion sale of its Depop business earlier this year.
While BTIG believes much of the recent strength is fundamentally driven, it noted that short covering and investor rotation out of AI-related stocks have also contributed to the move. The firm's valuation analysis shows Etsy now trades at roughly 11x estimated 2027 adjusted EBITDA, up from about 6x at its February lows, a level BTIG considers less compelling given consensus expectations for only 3.6% annual gross merchandise sales growth through 2028.
BTIG added that Etsy's valuation is approaching that of peers with stronger growth profiles, including Amazon and eBay.
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