Analysis of Etsy's Stock Price Plunge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy ETSY?
Source: Fool
- Declining Sales: Etsy's gross merchandise sales fell to $10.5 billion in 2025, a 4% decrease year-over-year and a 14% drop from the peak of $12.2 billion in 2021, indicating the need for the company to find ways to grow this key performance metric for sustainable revenue gains.
- Plummeting Earnings: The company's net income dropped from $494 million in 2021, a 41.3% year-over-year increase, to just $163 million in 2025, reflecting a troubling 67% decline that correlates with the decrease in gross merchandise sales, leading to a significant stock price decline.
- Rising Cost Structure: Etsy's operating expenses surged by 50% from $1.2 billion in 2021 to $1.8 billion in 2025 as the company aimed to revitalize its business, particularly with notable increases in marketing and product development costs, further squeezing profit margins.
- Low Consumer Confidence: Consumer confidence hit an all-time low in April, which has negatively impacted Etsy's weak gross merchandise sales and shrinking profit base, highlighting the company's reliance on strong discretionary spending behavior despite its unique position in the competitive e-commerce market.
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Analyst Views on ETSY
Wall Street analysts forecast ETSY stock price to rise
26 Analyst Rating
6 Buy
18 Hold
2 Sell
Hold
Current: 63.480
Low
52.00
Averages
67.71
High
80.00
Current: 63.480
Low
52.00
Averages
67.71
High
80.00
About ETSY
Etsy, Inc. operates two-sided online marketplaces that connect buyers and sellers around the world. The Company's primary marketplace, Etsy.com, is the global destination for goods made by independent sellers. In addition to its core Etsy marketplace, its House of Brand consists of Depop Limited (Depop), which is its fashion resale marketplace. Each marketplace primarily operates independently, while benefiting from shared expertise in product development, marketing, technology, and customer support. The Company's top six retail categories on the Etsy marketplace include homewares and home furnishings, jewelry and personal accessories, apparel, craft supplies, paper and party supplies, and toys and games.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Etsy Faces Dual Decline in Sales and Profits
- Sales Decline: Etsy's gross merchandise sales fell to $10.5 billion in 2025, a 4% year-over-year decline and a 14% drop from the peak of $12.2 billion in 2021, indicating a significant weakness in the core marketplace that necessitates growth strategies for sustainable revenue.
- Profit Plummet: The company's net income dropped from $494 million in 2021, a 41.3% increase from the previous year, to just $163 million in 2025, reflecting a troubling 67% decline that correlates with the decrease in gross merchandise sales and has severely impacted stock performance.
- Cost Structure Inflation: Operating expenses surged by 50%, rising from $1.2 billion in 2021 to $1.8 billion in 2025, primarily due to increased spending on marketing and product development, which has compounded the financial strain on the company.
- Consumer Confidence Low: Consumer confidence hit an all-time low in April, mirroring the broader economic downturn and negatively affecting Etsy's sales and profit margins, particularly as its products are categorized as discretionary rather than essential, relying heavily on robust discretionary spending.
See More
Etsy's Sales Decline Continues, Profits Plummet
- Sales Decline: Etsy's gross merchandise sales totaled $10.5 billion in 2025, reflecting a 4% year-over-year decline and a 14% drop from the peak of $12.2 billion in 2021, indicating a weak core marketplace that necessitates growth strategies for sustainable revenue.
- Profits Plummet: The company's net income fell to $163 million in 2025, a staggering 67% decrease from $494 million in 2021, highlighting the direct impact of declining sales on profitability and resulting in a significant stock price drop.
- Rising Operating Costs: Operating expenses surged by 50%, increasing from $1.2 billion in 2021 to $1.8 billion in 2025, with notable rises in marketing and product development costs, further squeezing profit margins.
- Low Consumer Confidence: With consumer confidence hitting an all-time low in April, Etsy's products are viewed as discretionary rather than essential, making the company vulnerable to economic downturns that exacerbate its financial struggles.
See More
Analysis of Etsy's Stock Price Plunge
- Declining Sales: Etsy's gross merchandise sales fell to $10.5 billion in 2025, a 4% decrease year-over-year and a 14% drop from the peak of $12.2 billion in 2021, indicating the need for the company to find ways to grow this key performance metric for sustainable revenue gains.
- Plummeting Earnings: The company's net income dropped from $494 million in 2021, a 41.3% year-over-year increase, to just $163 million in 2025, reflecting a troubling 67% decline that correlates with the decrease in gross merchandise sales, leading to a significant stock price decline.
- Rising Cost Structure: Etsy's operating expenses surged by 50% from $1.2 billion in 2021 to $1.8 billion in 2025 as the company aimed to revitalize its business, particularly with notable increases in marketing and product development costs, further squeezing profit margins.
- Low Consumer Confidence: Consumer confidence hit an all-time low in April, which has negatively impacted Etsy's weak gross merchandise sales and shrinking profit base, highlighting the company's reliance on strong discretionary spending behavior despite its unique position in the competitive e-commerce market.
See More
LTK Platform Achieves $6 Billion in Annual Retail Sales
- Founder's Story: LTK co-founder Amber Venz Box shared her journey of starting a blog in 2010 to transition her offline personal shopping business online, culminating in the LTK platform achieving $6 billion in annual retail sales and driving the creator economy forward.
- Business Model: LTK generates revenue by taking a transaction fee on every sale, providing creators with essential tools and infrastructure to connect with 8,000 retailers, ensuring they can earn commissions on product recommendations and achieve economic success.
- Platform Innovation: LTK recently launched a new operating system for creator commerce, leveraging hundreds of billions of data points to help brands find the right creators, enhancing the efficiency of brand-creator matching and fostering continuous innovation in the industry.
- Industry Outlook: With the rapid growth of the creator economy, LTK aims to democratize the connection between creators and brands by offering tools for free, anticipating significant growth in the industry and further solidifying LTK's leadership position in the market.
See More
Etsy's Stock Drops to $64, Future Potential Draws Attention
- Stock Decline: Etsy's stock peaked at $296.91 on November 24, 2021, but has since fallen to around $64, indicating a slowdown in growth and negative impacts from messy acquisitions.
- Declining Growth Metrics: In 2023 and 2024, Etsy's year-over-year growth rates for active sellers and buyers dropped to 21% and 1.5%, respectively, while gross merchandise sales (GMS) experienced negative growth, reflecting weakened market demand post-pandemic.
- Acquisition Impact: Etsy's acquisitions from 2019 to 2021, including Reverb and Depop, initially boosted revenues but led to margin compression and increased business complexity, adversely affecting overall profitability.
- Future Outlook: Although Etsy's high-growth phase is over, analysts project revenue and adjusted EBITDA growth rates of 1% and 5% from 2025 to 2028, suggesting a gradual recovery of its core business.
See More
Etsy Right-Sizes Business Amid Market Challenges
- Performance Decline: Etsy's active seller and buyer growth plummeted to 21% and 1.5% in 2023 and 2024, respectively, indicating a weakening post-pandemic market demand that exposes the company to intensified competition, particularly from Amazon and other discount e-commerce platforms.
- Acquisition Impact: Although Etsy expanded its ecosystem through acquisitions of Reverb, Depop, and Elo7 from 2019 to 2021, these purchases ultimately compressed profit margins, adversely affecting the company's overall financial health.
- Business Streamlining: To counter market pressures, Etsy sold Reverb, Depop, and Elo7 over the past three years, aiming to streamline operations and boost advertising revenue while tightening spending to improve take rates, with a slight growth in GMS expected in 2025.
- Future Outlook: Analysts project that from 2025 to 2028, Etsy's revenue and adjusted EBITDA will grow at compound annual growth rates of 1% and 5%, respectively, signaling that while the high-growth phase has ended, the company is focused on strengthening its core business to navigate future challenges.
See More
Etsy Faces Dual Decline in Sales and Profits
- Sales Decline: Etsy's gross merchandise sales fell to $10.5 billion in 2025, a 4% year-over-year decline and a 14% drop from the peak of $12.2 billion in 2021, indicating a significant weakness in the core marketplace that necessitates growth strategies for sustainable revenue.
- Profit Plummet: The company's net income dropped from $494 million in 2021, a 41.3% increase from the previous year, to just $163 million in 2025, reflecting a troubling 67% decline that correlates with the decrease in gross merchandise sales and has severely impacted stock performance.
- Cost Structure Inflation: Operating expenses surged by 50%, rising from $1.2 billion in 2021 to $1.8 billion in 2025, primarily due to increased spending on marketing and product development, which has compounded the financial strain on the company.
- Consumer Confidence Low: Consumer confidence hit an all-time low in April, mirroring the broader economic downturn and negatively affecting Etsy's sales and profit margins, particularly as its products are categorized as discretionary rather than essential, relying heavily on robust discretionary spending.
See More
Etsy's Sales Decline Continues, Profits Plummet
- Sales Decline: Etsy's gross merchandise sales totaled $10.5 billion in 2025, reflecting a 4% year-over-year decline and a 14% drop from the peak of $12.2 billion in 2021, indicating a weak core marketplace that necessitates growth strategies for sustainable revenue.
- Profits Plummet: The company's net income fell to $163 million in 2025, a staggering 67% decrease from $494 million in 2021, highlighting the direct impact of declining sales on profitability and resulting in a significant stock price drop.
- Rising Operating Costs: Operating expenses surged by 50%, increasing from $1.2 billion in 2021 to $1.8 billion in 2025, with notable rises in marketing and product development costs, further squeezing profit margins.
- Low Consumer Confidence: With consumer confidence hitting an all-time low in April, Etsy's products are viewed as discretionary rather than essential, making the company vulnerable to economic downturns that exacerbate its financial struggles.
See More
Analysis of Etsy's Stock Price Plunge
- Declining Sales: Etsy's gross merchandise sales fell to $10.5 billion in 2025, a 4% decrease year-over-year and a 14% drop from the peak of $12.2 billion in 2021, indicating the need for the company to find ways to grow this key performance metric for sustainable revenue gains.
- Plummeting Earnings: The company's net income dropped from $494 million in 2021, a 41.3% year-over-year increase, to just $163 million in 2025, reflecting a troubling 67% decline that correlates with the decrease in gross merchandise sales, leading to a significant stock price decline.
- Rising Cost Structure: Etsy's operating expenses surged by 50% from $1.2 billion in 2021 to $1.8 billion in 2025 as the company aimed to revitalize its business, particularly with notable increases in marketing and product development costs, further squeezing profit margins.
- Low Consumer Confidence: Consumer confidence hit an all-time low in April, which has negatively impacted Etsy's weak gross merchandise sales and shrinking profit base, highlighting the company's reliance on strong discretionary spending behavior despite its unique position in the competitive e-commerce market.
See More
LTK Platform Achieves $6 Billion in Annual Retail Sales
- Founder's Story: LTK co-founder Amber Venz Box shared her journey of starting a blog in 2010 to transition her offline personal shopping business online, culminating in the LTK platform achieving $6 billion in annual retail sales and driving the creator economy forward.
- Business Model: LTK generates revenue by taking a transaction fee on every sale, providing creators with essential tools and infrastructure to connect with 8,000 retailers, ensuring they can earn commissions on product recommendations and achieve economic success.
- Platform Innovation: LTK recently launched a new operating system for creator commerce, leveraging hundreds of billions of data points to help brands find the right creators, enhancing the efficiency of brand-creator matching and fostering continuous innovation in the industry.
- Industry Outlook: With the rapid growth of the creator economy, LTK aims to democratize the connection between creators and brands by offering tools for free, anticipating significant growth in the industry and further solidifying LTK's leadership position in the market.
See More
Etsy's Stock Drops to $64, Future Potential Draws Attention
- Stock Decline: Etsy's stock peaked at $296.91 on November 24, 2021, but has since fallen to around $64, indicating a slowdown in growth and negative impacts from messy acquisitions.
- Declining Growth Metrics: In 2023 and 2024, Etsy's year-over-year growth rates for active sellers and buyers dropped to 21% and 1.5%, respectively, while gross merchandise sales (GMS) experienced negative growth, reflecting weakened market demand post-pandemic.
- Acquisition Impact: Etsy's acquisitions from 2019 to 2021, including Reverb and Depop, initially boosted revenues but led to margin compression and increased business complexity, adversely affecting overall profitability.
- Future Outlook: Although Etsy's high-growth phase is over, analysts project revenue and adjusted EBITDA growth rates of 1% and 5% from 2025 to 2028, suggesting a gradual recovery of its core business.
See More
Etsy Right-Sizes Business Amid Market Challenges
- Performance Decline: Etsy's active seller and buyer growth plummeted to 21% and 1.5% in 2023 and 2024, respectively, indicating a weakening post-pandemic market demand that exposes the company to intensified competition, particularly from Amazon and other discount e-commerce platforms.
- Acquisition Impact: Although Etsy expanded its ecosystem through acquisitions of Reverb, Depop, and Elo7 from 2019 to 2021, these purchases ultimately compressed profit margins, adversely affecting the company's overall financial health.
- Business Streamlining: To counter market pressures, Etsy sold Reverb, Depop, and Elo7 over the past three years, aiming to streamline operations and boost advertising revenue while tightening spending to improve take rates, with a slight growth in GMS expected in 2025.
- Future Outlook: Analysts project that from 2025 to 2028, Etsy's revenue and adjusted EBITDA will grow at compound annual growth rates of 1% and 5%, respectively, signaling that while the high-growth phase has ended, the company is focused on strengthening its core business to navigate future challenges.
See More
