ETSY Should I Buy
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ETSY Inc is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some financial growth in its latest quarter, the technical indicators, trading sentiment, and analyst ratings suggest a cautious approach. The stock is currently in a bearish trend, with hedge funds selling and no significant insider activity. Additionally, the upcoming earnings report introduces uncertainty, and the lack of strong positive catalysts makes it prudent to wait for clearer signals before investing.
The technical indicators for ETSY are bearish. The MACD histogram is negative and expanding downward, the RSI is neutral but leaning toward oversold territory, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key pivot levels, with support at $47.51 and resistance at $52.22. Overall, the technical setup does not suggest a strong buying opportunity.
The company's financial performance in Q3 2025 showed revenue growth of 2.36% YoY, net income growth of 31.62% YoY, and EPS growth of 40% YoY. Analysts believe the company is on a trajectory to return to growth, and the upcoming earnings report could provide further clarity.
Hedge funds are aggressively selling, with a 262.63% increase in selling activity last quarter. Analysts have been lowering price targets consistently, citing macroeconomic concerns, valuation compression, and potential pricing pressure in the e-commerce sector. The technical indicators are bearish, and the stock is trading below key support levels. Additionally, there is no recent congress trading data or significant insider buying to suggest confidence in the stock.
In Q3 2025, ETSY reported revenue of $678.03M, up 2.36% YoY. Net income increased by 31.62% YoY to $75.50M, and EPS grew by 40% YoY to $0.63. However, gross margin declined slightly to 71.29%, down 0.96% YoY. While the financials show growth, the slight decline in gross margin and broader market concerns temper enthusiasm.
Analysts have a neutral to cautious outlook on ETSY. Multiple firms, including BofA, Stifel, Cantor Fitzgerald, and Jefferies, have recently lowered their price targets, citing valuation concerns, macroeconomic pressures, and competitive challenges. The average price target now ranges between $55 and $63, with most analysts maintaining a Neutral or Hold rating.
