📊 ETSY Key Takeaways
Is ETSY a Good Investment? Thesis Analysis
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.
Why Buy 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
ETSY Investment Risks to Consider
- 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
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
ETSY Financial Metrics
💡 AI Analyst Insight
The 23.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
ETSY Profitability Ratios
ETSY vs Default Sector
How ETSY INC compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is ETSY Overvalued or Undervalued?
Based on fundamental analysis, ETSY INC has mixed fundamental signals relative to the Default 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 Balance Sheet & Liquidity
ETSY 5-Year Financial Trend & Growth Analysis
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 Growth Metrics (YoY)
ETSY Quarterly 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 Capital Allocation
ETSY SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for ETSY INC (CIK: 0001370637)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Mar 18, 2026 | 4 | xslF345X06/form4-03182026_050307.xml | View → |
| Mar 18, 2026 | 4 | xslF345X06/form4-03182026_050304.xml | View → |
| Mar 18, 2026 | 4 | xslF345X06/form4-03182026_050302.xml | View → |
| Mar 18, 2026 | 4 | xslF345X06/form4-03182026_050314.xml | View → |
| Mar 18, 2026 | 4 | xslF345X06/form4-03182026_050312.xml | View → |
❓ Frequently Asked Questions about ETSY
What is the AI rating for ETSY?
ETSY INC (ETSY) has an AI rating of HOLD with 62% 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.
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.
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 March 2026, ETSY INC has a HOLD rating with 62% 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: 15%), net margin of 5.7% (sector avg: 12%). 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 Default stocks?
Vs Default sector averages: Net margin 5.7% (avg: 12%), ROE N/A (avg: 15%), current ratio 1.44 (avg: 1.8).