TLDR
- Oppenheimer upgraded Etsy from Perform to Outperform with a $90 price target, implying 21% upside
- Etsy stock rose 2.9% in premarket trading Tuesday and is up 34% year-to-date
- Analyst Jason Helfstein cited AI search improvements, better app engagement, and stronger conversion rates
- A survey of 2,500 U.S. consumers found 88% went directly to Etsy’s site or app rather than Google Search
- Oppenheimer raised its FY26 GMS estimate to a street high and forecasts 5% GMS growth in FY27 and FY28
Etsy stock jumped 2.9% in premarket trading Tuesday after Oppenheimer upgraded the stock from Perform to Outperform, setting a $90 price target. That target represents 21% upside from Monday’s closing price.
The upgrade was driven by analyst Jason Helfstein, who pointed to AI-powered search improvements, better product discovery, and stronger app engagement as key reasons for the more bullish stance.
Etsy’s stock is up 34% year-to-date, compared to 11% for the S&P 500.
AI Search Reducing Dependence on Google
One of the more telling data points from Oppenheimer’s research is how Etsy shoppers are finding the platform. A survey of 2,500 U.S. consumers found that 88% went directly to Etsy’s website or app instead of using Google Search.
That’s a meaningful shift. Less reliance on Google means Etsy has more control over its own traffic and is less exposed to algorithm changes that have historically hurt the platform.
Helfstein noted that AI-driven search improvements appear to be working. The survey found 65% of consumers polled said they were “very” or “somewhat” likely to buy an item on Etsy. That’s not a bad conversion signal.
The analyst also flagged that regression analysis of SimilarWeb website visit data suggests third quarter non-app buyers were flat year-over-year, compared to a 3% decline in the second quarter. That improvement points to the high end of Etsy’s gross merchandise sales guidance being within reach.
Estimates Revised Higher
Oppenheimer raised its FY26 GMS estimate by 1%, putting it at the top end of Street estimates. The firm now forecasts 5% GMS growth in both FY27 and FY28.
Those estimates factor in expected market share losses within the online handmade segment as new competitors enter. Oppenheimer projects the global online handmade market will grow 9% annually between 2025 and 2028, with Etsy losing 117 to 135 basis points of share in 2027 and 2028.
Worth noting: Oppenheimer’s handmade market analysis covers about 73% of the survey’s product scope. Etsy’s actual catalog is much broader than handmade goods alone, which means the share loss concern may be overstated.
The $90 price target is based on 12 times 2027 EBITDA. That’s a 10% discount to eBay, even though Oppenheimer sees similar growth expectations for both companies.
Helfstein conservatively assumed no improvement in app GMS on a two-year basis for his projections, despite what he describes as clear product upgrades. If app performance does improve, estimates could move higher.
Seeking Alpha’s Quant rating for Etsy sits at 3.95 out of 5. Both Seeking Alpha authors and Wall Street analysts hold a Buy rating on the stock.
Etsy was trading more than 3% higher in Tuesday’s premarket session.
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