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Is Etsy Stock Winning Back Buyers Faster Than Expected?

Etsy, Inc.’s ETSY latest buyer metrics suggest a recovery is beginning, though the evidence remains early rather than decisive. First-quarter 2026 operating metrics paint a mixed but healthier picture of buyer engagement. For the first time in two years, active buyers grew 0.1% sequentially to 86.6…

Etsy, Inc.’s ETSY latest buyer metrics suggest a recovery is beginning, though the evidence remains early rather than decisive. First-quarter 2026 operating metrics paint a mixed but healthier picture of buyer engagement. For the first time in two years, active buyers grew 0.1% sequentially to 86.6 million. This marks a directional shift, even though active buyers remain down 2.1% year over year.

The more encouraging part of the story was buyer additions. Gross buyer additions rose 4.8% year over year to 11.9 million, driven by 5 million new buyers and 6.9 million reactivated buyers. New buyers increased 2.3%, while reactivated buyers rose 6.6%, suggesting Etsy is gaining traction both in attracting fresh shoppers and bringing back lapsed users.

Spending behavior also improved. Gross merchandise sales (GMS) per active buyer reached $122, up 1.5% year over year and 1.1% sequentially, marking the first year-over-year increase since late 2022 and the fourth straight quarter of sequential improvement. Still, purchase frequency remained modestly lower than the prior year. Repeat buyers and habitual buyers fell 3.2% and 5.7% year over year, respectively, though management noted moderation in sequential declines.

Etsy’s app momentum adds another positive signal. App GMS rose 11.2% year over year and represented about 47% of total GMS. With app users visiting more often, engaging more deeply and converting at higher rates, Etsy’s buyer turnaround appears to be gaining early momentum.

The company is using personalized search, home feed recommendations, AI-generated buyer profiles, targeted offers, and more relevant email and push messaging to improve discovery, strengthen loyalty and deepen direct relationships with buyers. The operating metrics support the view that buyer recovery is arriving sooner than expected, though stronger purchase frequency is still needed to confirm durability.

How eBay & Shopify Compare With Etsy

eBay Inc. EBAY reported that trailing 12-month active buyers increased 1% year over year to nearly 136 million, with U.S. buyer growth accelerating to nearly 6% during the first quarter of 2026. The company is improving discovery and engagement through AI-powered Agentic Search, enhanced eBay Live experiences, better event discovery within its app and partnerships that expand the reach of its marketplace. eBay believes these AI-native experiences and community-driven initiatives are making shopping more relevant while supporting higher buyer engagement.

Shopify Inc. SHOP is expanding personalized discovery across multiple channels, including AI chats, the Shop App and marketplaces, while using Shop Pay and its buyer network to improve conversion and encourage repeat purchases. Shopify also highlighted that traffic from Catalog-powered AI searches converted at more than twice the rate of general AI search traffic, reinforcing its AI-driven commerce strategy. These initiatives position Shopify to strengthen buyer experiences by helping merchants drive more relevant discovery and higher conversion.

What the Latest Metrics Say About Etsy

Etsy has seen its shares jump 42.7% over the past three months compared with the industry’s 8.1% rise.

From a valuation standpoint, Etsy's forward 12-month price-to-earnings ratio stands at 13.14, lower than the industry’s ratio of 21.27. ETSY is also trading below its 12-month median level of 20.

The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to 6.29 over the past seven days.

Etsy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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