3 Things to Know About Etsy Stock Before You Buy

By Neil Patel – Mar 4, 2026 at 12:00AM ESTKey PointsSince the core Etsy marketplace’s gross merchandise sales peaked in 2021, it’s been on a steady decline.With the sale of Depop, management is focused on streamlining operations.The stock’s valuation is historically cheap, but investors should wait for financial improvements.Thanks to the immediate surge in online shopping after the onset of the COVID-19 pandemic, Etsy (ETSY +0.91%) shares rocketed higher. They were up 610% over the 24-month period leading up to their peak in November 2021, as activity on the marketplace was robust. But softer growth since then has pressured shares, which now trade 81% below the record. Here are three things investors need to know about this e-commerce stock. Image source: Getty Images. 1. Achieving growth is challenging The core Etsy marketplace handled $10.5 billion in gross merchandise sales (GMS), or the dollar amount of transactions that occur on its platform, in 2025. That was down 4% year over year. And it was down 14% compared to a record of $12.2 billion in 2021. Etsy has been in decline since the depths of the pandemic crisis. I believe this points to a sobering reality, which is that there aren't a growing number of consumers interested in special, handcrafted, and unique goods. For what it's worth, management expects "slight year-over-year growth in GMS" in 2026. 2. Wasting shareholder capital In the summer of 2021, Etsy bought secondhand fashion marketplace Depop for over $1.6 billion. This was part of previous CEO Josh Silverman's "House of Brands" strategy to enable Etsy to cater to various niche categories. We're almost five years past that acquisition, and Etsy has decided to sell Depop to eBay for $1.2 billion. That's a roughly 25% haircut that destroys shareholder capital. And it follows other recent divestitures, with Etsy selling Reverb in 2025 and Elo7 in 2023. Now, the company can focus exclusively on its flagship marketplace under CEO Kruti Patel Goyal, who took the top job at the start of this year. ExpandNYSE: ETSYEtsyToday's Change(0.91%) $0.49Current Price$54.46Key Data PointsMarket Cap$5.2BDay's Range$50.81 - $54.5552wk Range$40.05 - $76.52Volume3.4MAvg Vol3.8MGross Margin71.64% 3. Etsy's Valuation When assessing a stock that has gotten so crushed, buying it might make sense if value investors are interested. Is Etsy a smart buying opportunity? The fact that the business possesses a network effect is certainly a favorable attribute. As of Dec. 31, the Etsy marketplace had 5.6 million active sellers and 86.5 million active buyers all across the globe, which creates a two-sided platform that improves as the user base expands. It would be difficult for a rival marketplace to scale up to Etsy's size because it would need to attract buyers with no sellers and vice versa. Etsy trades at a price-to-sales ratio of 2.3, 68% below its historical average. However, I don't think that's enough to justify buying the stock. Until there's a return to consistent revenue and profit growth, investors should stay away.Read NextFeb 19, 2026 •By Joe TenebrusoWhy Etsy Stock Popped TodayFeb 1, 2026 •By Neil PatelIs It Time to Buy This Historically Cheap E-Commerce Stock? (Hint: It's Not Amazon)Dec 18, 2025 •By Neil PatelWhat to Watch With Etsy Stock in 2026Dec 11, 2025 •By Neil PatelHow Good Has Etsy Stock Actually Been?Nov 1, 2025 •By Jeremy BowmanEtsy Is Getting a New CEO.

Could This Be the Beginning of a Turnaround?Oct 29, 2025 •By Keith NoonanEtsy Stock Slumps 12.6% Following Major CEO AnnouncementAbout 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.TMFNeilPatelStocks MentionedEtsyNYSE: ETSY$54.37(+0.74%)+$0.40*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.