Needham raised its price target on Etsy to $85 from $65, citing strong first-quarter performance and a key growth inflection point. The firm highlighted the mobile app's momentum (nearing 50% of GMS with 11.2% YoY growth), improved marketplace trends, and AI-driven personalization tools as key drivers. Etsy's core marketplace returned to positive GMS growth for the first time in nearly three years, with four consecutive quarters of YoY acceleration. The roughly $1.2 billion in Depop proceeds could support share buybacks.

Etsy's stock has plummeted 78% from its November 2021 peak due to three key challenges: gross merchandise sales declined 4% in 2025 to $10.5 billion, net income fell 67% from $494 million in 2021 to $163 million in 2025, and operating expenses surged 50% to $1.8 billion. The company's reliance on discretionary consumer spending is further pressured by declining consumer confidence, making recovery uncertain.

Etsy's stock has fallen from its 2021 peak of $296.91 to $64, as pandemic-driven growth has slowed and acquisitions compressed margins. However, the company is now stabilizing its core business, divesting non-core assets, and improving profitability. Trading at just 9 times next year's adjusted EBITDA, Etsy appears undervalued and could be a compelling turnaround opportunity.

Etsy stock has fallen 53% since its 2023 high but has beaten the market with a 46% gain over the past year. Despite three consecutive years of declining gross merchandise sales and stagnant active seller growth, the company is refocusing on its core marketplace after selling Depop to eBay. With expectations for GMS growth to return in 2026 and potential tailwinds from economic pressures and AI displacement, analysts see potential for an Etsy renaissance.

eBay has delivered 15.8% annualized total returns over the past decade, outpacing the S&P 500 through steady business operations, aggressive share buybacks (62% reduction since 2015), and shareholder-friendly capital allocation. The company is acquiring Etsy's Depop service to access 56 million younger users, positioning itself as a defensible platform for rare and collectible items without pursuing expensive expansion like competitors.

eBay reported strong Q4 2025 earnings with revenue of $2.97 billion exceeding expectations and GMV growth of nearly 10% in the US. The company announced a $1.2 billion acquisition of Depop, a secondhand clothing marketplace, to capture Gen Z and Millennial customers. Three growth engines are driving eBay: advertising revenue approaching $2 billion annually, recommerce accounting for 40% of GMV, and the strategic Depop acquisition. However, some Q4 growth was commodity-driven and cyclical, gross margins declined, and the Depop deal is expected to dilute EPS until 2028.

KeyBanc Capital Markets analyst Ashley Owens maintains a Sector Weight rating on Etsy after the company agreed to sell Depop to eBay for $1.2 billion. While the sale allows Etsy to focus on its core marketplace and return capital to shareholders, Owens remains cautious about Etsy's ability to revive core GMS growth, which remains unproven.

U.S. stocks declined Thursday as President Trump hinted at potential military intervention in Iran, boosting crude oil to 7-month highs. The S&P 500 fell 0.3%, Nasdaq 100 and Dow Jones each dropped 0.5%. Energy stocks surged 0.8% while financials lagged. Notable movers included Occidental Petroleum jumping 9% on earnings beat, Booking Holdings falling 7%, and Deere & Company gaining 12.6% for its best day since March 2020.

U.S. stock futures declined on Thursday as escalating US-Iran tensions pushed oil prices higher and the Federal Reserve's January meeting minutes revealed disagreements on interest rates. Despite market expectations for two rate cuts by year-end, the CME FedWatch tool shows a 94% probability of unchanged rates in March. Key stocks in focus include DoorDash (up on positive guidance), eBay (up on strong earnings and Depop acquisition), and Walmart (down ahead of earnings).

eBay announced the acquisition of secondhand fashion marketplace Depop from Etsy for approximately $1.2 billion in cash, signaling aggressive expansion into the fast-growing recommerce space targeting younger demographics. The deal was accompanied by strong Q4 2025 earnings with revenue of $3 billion (15% YoY growth), adjusted EPS of $1.41 beating expectations, and GMV of $21.2 billion. eBay shares surged over 8% in after-hours trading, with the company also raising its dividend by 7% and authorizing an additional $2 billion for share repurchases.

Etsy shares surged 14.83% in after-hours trading following the announcement of a definitive agreement to sell its fashion marketplace Depop to eBay for approximately $1.2 billion in cash. Etsy plans to use the proceeds for general corporate purposes, share repurchases, and core marketplace investments. The transaction is expected to close in Q2 2026 and has been unanimously approved by both boards.

Matt Frankel discusses three stocks he is considering adding to his portfolio as 2026 begins, despite the stock market being near all-time highs. The article identifies long-term investment opportunities in the current market environment.