📊 ETSY Key Takeaways
Is Etsy Inc. (ETSY) a Good Investment?
Etsy demonstrates strong operational cash generation with 23.5% FCF margin and solid gross margins of 71.6%, indicating a fundamentally sound business model. However, significant concerns arise from negative stockholders' equity of -1.1B against 2.3B in long-term debt, combined with a 46.3% YoY decline in net income despite 2.7% revenue growth, signaling deteriorating profitability and financial structure fragility.
Etsy shows a still-healthy core business with very high gross margins and strong free cash flow conversion, which supports resilience despite modest top-line growth. However, the sharp decline in net income and EPS, combined with negative equity and substantial debt, suggests weakening earnings quality and a balance sheet that deserves caution.
Why Buy Etsy Inc. Stock? ETSY Key Strengths
- Exceptional free cash flow generation of $678M with 23.5% FCF margin demonstrates strong cash conversion
- High gross margin of 71.6% indicates pricing power and efficient platform economics
- Strong interest coverage ratio of 19.0x shows ability to service debt obligations
- Strong gross margin profile indicates an asset-light, scalable marketplace model
- Robust free cash flow generation with low capital expenditure needs
- Solid liquidity and strong interest coverage reduce near-term financial stress
ETSY Stock Risks: Etsy Inc. Investment Risks
- Negative stockholders' equity of -1.1B indicates liabilities exceed assets, reflecting capital structure distress
- Net income declined 46.3% YoY while revenue grew only 2.7%, showing margin compression and profitability deterioration
- Total liabilities of 3.9B exceed total assets of 2.8B, creating financial imbalance and refinancing risk
- Revenue growth is slow, limiting operating leverage and signaling a maturing demand profile
- Net income and diluted EPS declined sharply year over year, pointing to earnings pressure
- Negative stockholders equity and high long-term debt increase balance sheet risk if fundamentals weaken further
Key Metrics to Watch
- Net income trend and operating margin recovery
- Stockholders' equity recovery and debt reduction trajectory
- Operating cash flow sustainability amid profitability pressure
- Revenue growth and take-rate-driven operating margin trend
- Free cash flow durability relative to debt levels and interest burden
Etsy Inc. (ETSY) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 23.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
ETSY Profit Margin, ROE & Profitability Analysis
ETSY vs Services Sector: How Etsy Inc. Compares
How Etsy Inc. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Etsy Inc. Stock Overvalued? ETSY Valuation Analysis 2026
Based on fundamental analysis, Etsy Inc. has mixed fundamental signals relative to the Services sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Etsy Inc. Balance Sheet: ETSY Debt, Cash & Liquidity
ETSY Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Etsy Inc.'s revenue has grown significantly by 24% over the 5-year period, indicating strong business expansion. The most recent EPS of $2.24 reflects profitable operations.
ETSY Revenue Growth, EPS Growth & YoY Performance
ETSY Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $662.4M | $52.2M | $0.45 |
| Q2 2025 | $647.8M | -$23.3M | $-0.22 |
| Q1 2025 | $646.0M | -$52.1M | $0.48 |
| Q3 2024 | $636.3M | $57.4M | $0.45 |
| Q2 2024 | $628.9M | $53.0M | $0.41 |
| Q1 2024 | $640.9M | $63.0M | $0.48 |
| Q3 2023 | $594.5M | $87.9M | $0.64 |
| Q2 2023 | $585.1M | $61.9M | $0.45 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Etsy Inc. Dividends, Buybacks & Capital Allocation
ETSY SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Etsy Inc. (CIK: 0001370637)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_050404.xml | View → |
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_050401.xml | View → |
| Apr 3, 2026 | 4 | xslF345X06/form4-04032026_080419.xml | View → |
| Apr 3, 2026 | 4 | xslF345X06/form4-04032026_080445.xml | View → |
| Apr 3, 2026 | 4 | xslF345X06/form4-04032026_080431.xml | View → |
❓ Frequently Asked Questions about ETSY
What is the AI rating for ETSY?
Etsy Inc. (ETSY) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ETSY's key strengths?
Claude: Exceptional free cash flow generation of $678M with 23.5% FCF margin demonstrates strong cash conversion. High gross margin of 71.6% indicates pricing power and efficient platform economics. ChatGPT: Strong gross margin profile indicates an asset-light, scalable marketplace model. Robust free cash flow generation with low capital expenditure needs.
What are the risks of investing in ETSY?
Claude: Negative stockholders' equity of -1.1B indicates liabilities exceed assets, reflecting capital structure distress. Net income declined 46.3% YoY while revenue grew only 2.7%, showing margin compression and profitability deterioration. ChatGPT: Revenue growth is slow, limiting operating leverage and signaling a maturing demand profile. Net income and diluted EPS declined sharply year over year, pointing to earnings pressure.
What is ETSY's revenue and growth?
Etsy Inc. reported revenue of $2.9B.
Does ETSY pay dividends?
Etsy Inc. does not currently pay dividends.
Where can I find ETSY SEC filings?
Official SEC filings for Etsy Inc. (CIK: 0001370637) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ETSY's EPS?
Etsy Inc. has a diluted EPS of $1.39.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ETSY a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Etsy Inc. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is ETSY stock overvalued or undervalued?
Valuation metrics for ETSY: ROE of N/A (sector avg: 16%), net margin of 5.7% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy ETSY stock in 2026?
Our dual AI analysis gives Etsy Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ETSY's free cash flow?
Etsy Inc.'s operating cash flow is $693.4M, with capital expenditures of $15.4M. FCF margin is 23.5%.
How does ETSY compare to other Services stocks?
Vs Services sector averages: Net margin 5.7% (avg: 10%), ROE N/A (avg: 16%), current ratio 1.44 (avg: 1.5).