Truist says this internet retailer's revenue is tracking above expectations so investors should buy the dip

CNBC

17-06-2025

Truist Securities sees a rosy outlook ahead for Etsy . The investment firm maintained its buy rating on the e-commerce retailer, but lifted its price target to $60 per share from $55. This updated forecast is roughly 11% above Etsy's Monday closing price of $53.89. Shares of Etsy have risen nearly 2% this year. ETSY YTD mountain ETSY YTD chart As a catalyst, analyst Youssef Squali pointed to Truist card data, which has revealed that Etsy's 2025 marketplace revenue is tracking ahead of consensus estimates for the quarter. As a result, the analyst has raised his revenue estimate for the current quarter to $463 million from $455 million. Meanwhile, monthly active users, or MAU, on the Etsy app picked up in both April and May. "We note that MAU Y/Y growth eclipsed double-digits in May, the first time in over 22 months, which we attribute to the company's efforts to re-engage in short-term GMS [gross merchandise sales] conversion activity along with an increase in marketing efficiency," the analyst wrote. Although tariffs could be a sore spot for Etsy, the company remains relatively well-insulated, Squali said. Around 50% of its gross merchandise sales last year came from domestic transactions, and no single country's makes up more than 4% of Etsy's total sales, he said, highlighting the diversified nature of Etsy's seller base. Also, its exposure to the eliminiation of the de minimis exemption — which previously exempted importers that shipped goods valued at less than $800 from duties — is "manageable," the analyst said. "While the company does have exposure to the De Minimis exemption being eliminated in China, we believe it's relatively better insulated than some of its competitors including Temu (owned by PDD , [not rated]) and Shein (private) which have started raising prices on goods as a result of the Chinese Tariffs, and the end of the De Minimis exemption," he wrote. "Another benefit to Etsy from this dynamic is a pullback in ad spend at Temu and Shein." The analyst expects Etsy's gross merchandise sales growth and margins to improve in the latter half of this year, citing management's refocus on investing in growth. Squali added that Etsy's prioritization into paid social channels — at a time of declining organic traffic from Google search — could begin paying off. "Additionally, and importantly, Etsy saw growing contribution of GMS from Paid Social channels in 1Q, which we view as a positive signal for future growth as Etsy utilizes Paid Social channels to re-engage lapsed buyers on the platform," the analyst said.