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Etsy $ETSY ( ▼ 1.77% ) is getting a second look after agreeing to sell Depop to eBay $EBAY ( ▲ 0.04% ) for $1.2 billion.
The move sent shares up 20% in the last week, though the stock remains down 4.4% this year. Barclays $BCS ( ▲ 1.95% ) upgraded Etsy to Overweight and raised its price target to $72, implying roughly 35% upside.
Analyst Trevor Young said the Depop sale refocuses the company on its core marketplace and positions it to accelerate buybacks while strengthening the balance sheet.
Core Metrics Improve
BTIG reiterated its Buy rating after fourth-quarter results.
Etsy earned $0.92 per share, topping the $0.84 estimate. Revenue slightly missed expectations, but gross merchandise sales growth returned at the core marketplace, rising 0.1% and edging past zero growth forecasts.
BTIG’s Marvin Fong highlighted better-than-expected buyer growth. He noted Etsy remains one of the top five most visited websites, with more than 86 million global buyers.
Fong trimmed his price target to $65, still about 23% above recent levels.
Valuation And The Road Ahead
Depop had been investing heavily in marketing and was negative EBITDA. Analysts believe the sale allows Etsy to reallocate capital toward higher return initiatives.
Etsy trades at a forward multiple of 17.36, below the S&P 500 at 21.8.
Barclays also pointed to improving first-time buyer trends and sees metrics continuing to move in the right direction through 2026.
The environment remains challenging, given Etsy’s exposure to discretionary spending. But with a tighter focus and solid buyer metrics, analysts see signs of a turnaround.
