Guggenheim Lowers Etsy Price Target Following Q1 Report

Guggenheim analysts on Thursday lowered their price target on Etsy Inc. ETSY from $70 to $50 following the company’s Q1 earnings report.

What To Know: Lead analyst Steven Forbes acknowledged that Etsy's first-quarter operating results broadly exceeded expectations but suggested this upside was offset by a gross margin miss and what he called "broad-based expense control," which ultimately muted the quality of the beat.

Management expects gross merchandise sales (GMS) to fall 7–8% year-over-year, with adjusted EBITDA margins around 25%, below the analyst’s prior assumptions. Forbes remarked that new buyer trends remained "disappointing" and the decline in core marketplace performance suggests a weakening fundamental backdrop. Despite management’s intention to ramp up engagement-focused investments and spending in newer marketing and loyalty initiatives, Guggenheim revised its 2025–2026 EBITDA estimates down by 7–9%, citing reduced operating leverage and persistent ROI concerns.

Forbes highlighted management's continued push into performance marketing, with spending up ~20% in first-quarter and a 46% increase in social media marketing but noted that return on investment concerns remain unresolved. He also pointed to rising product development and compute costs related to machine learning and free shipping programs as incremental pressures on the expense line.

While Guggenheim maintained its Buy rating, the revised outlook reflects tempered expectations, a more cautious stance on margin trends and concern over execution risk as Etsy navigates a period of slower buyer growth and heavier reinvestment.

ETSY Price Action: Etsy shares were down 1.79% at $42.70 at the time of writing, according to Benzinga Pro.