Etsy (NYSE: ETSY) is showing signs that its turnaround is finally working.

After reporting better-than-expected second-quarter earnings, JPMorgan upgraded the stock to an Overweight rating and set a $100 price target. The bank believes Etsy’s recent improvements are helping the company grow again after a difficult stretch.

One of the biggest reasons for the upgrade is Etsy’s improving marketplace sales. The company has now reported three straight quarters of year-over-year growth in gross merchandise sales (GMS). GMS measures the total value of products sold on Etsy’s marketplace and is one of the company’s most important growth numbers.

Even better, sales growth is speeding up. Etsy’s GMS increased just 0.1% in the fourth quarter of 2025. By the second quarter of 2026, that growth had improved to 7.5%. That’s an encouraging sign that more shoppers are returning to the platform and spending more money.

Strong Earnings Beat Expectations

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Etsy also delivered a strong earnings report. The company earned 98 cents per share, beating Wall Street estimates by 25 cents. Revenue came in at $668.3 million, up 6.2% from a year ago. That was more than $21 million above analysts’ expectations.

Along with strong earnings, Etsy announced a new $2 billion share buyback program. Buybacks reduce the number of shares outstanding, which can increase earnings per share over time and return value to shareholders.

Management also became more optimistic about 2026. Etsy now expects gross merchandise sales to grow by a mid-single-digit percentage for the full year. The company said:

“We anticipate that GMS growth at Etsy will be in the mid-single-digit range for the full year 2026.” Etsy also raised its profit outlook, with management now expecting for its adjusted EBITDA margin to be between 29% and 30% for the year.

In short, Etsy’s latest earnings report gives investors several reasons to feel encouraged. The company beat expectations on both earnings and revenue, raised its outlook for the full year, and announced a $2 billion share buyback program. At the same time, marketplace sales have now grown for three straight quarters, with growth continuing to improve.

Sincerely,

Ian Cooper