How Good Has Etsy Stock Actually Been?

By Neil Patel – Dec 11, 2025 at 7:15PMKey PointsEtsy was once one of the hottest stocks on Wall Street, with shares rising nearly 2,200% in the five years leading up to their peak. Weaker fundamental performance has resulted in disappointing returns for investors recently. Gross merchandise sales continue declining at the same time as margins compress. These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSE: ETSYEtsyMarket Cap$5.4BToday's Changeangle-down(-2.27%) $1.24Current Price$53.49Price as of December 11, 2025 at 4:00 PM ETThis e-commerce niche provider sells differentiated goods on its marketplace.When it comes to online shopping, Amazon is without question the dominant force, with its massive selection and sprawling logistics footprint. However, Etsy (ETSY 2.27%) has found its place in the industry. It's a top choice for those consumers searching for unique, vintage, and handcrafted items. Before investors consider buying this e-commerce stock, though, it's a smart move to take a closer look at Etsy's performance. Image source: Getty Images. Etsy shares have taken a turn for the worse During the five-year stretch leading up to their peak, Etsy shares skyrocketed 2,160%. This was one of the hottest stocks on Wall Street. It's been hard to watch since then, though. In the past five years, the stock has tanked 66% (as of Dec. 9). In the past one- and three-year periods, investors would've also lost money owning the business. That's very discouraging. The S&P 500 has performed drastically better. The closely watched benchmark has produced a total return of 99% in the trailing five years. It has generated a positive total return in the past 12 and 36 months as well, running circles around Etsy.Advertisement ExpandNYSE: ETSYEtsyToday's Change(-2.27%) $-1.24Current Price$53.49Key Data PointsMarket Cap$5BDay's Range$53.38 - $55.5252wk Range$40.05 - $76.52Volume2.7MAvg Vol5MGross Margin72.24%Dividend YieldN/A Are Etsy's best days behind it? Etsy's business was firing on all cylinders in the years before 2020. And the COVID-19 pandemic simply supercharged growth, as shoppers gravitated toward digital commerce at the expense of brick-and-mortar retail. Most observers would have agreed that Etsy looked like a solid business. All key metrics were trending in the right direction. The base of active buyers and sellers was expanding rapidly. It was very profitable and generating loads of free cash flow. And it benefits from a powerful network effect. But it's been a completely different story in the past couple of years, as the fundamentals weakened dramatically. The company is struggling to grow. Gross merchandise sales on the Etsy marketplace totaled $2.4 billion in the third quarter (ended Sept. 30), down 2.4% year over year. And the operating margin of 12.2% is lower than in the same period of 2021. Etsy's costs are rising while activity on its marketplace is under pressure. At the same time, the domestic e-commerce industry overall has done well. Total sales have steadily climbed in recent years. So, what's happening with Etsy can be a cause for concern. Maybe the discretionary nature of the platform is now a weakness as consumers are discerning with their spending. On the one hand, the stock is reasonably valued, as it trades at a forward price-to-earnings ratio of 19.8. On the other hand, the market might be signaling that it has lost hope in the business. This pessimistic view might be warranted. About the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelRead NextNov 1, 2025 •By Jeremy BowmanEtsy Is Getting a New CEO.

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