Key Takeaways
- Shopify stock fell 6% today after a third-quarter report with 32% revenue growth and GMV a bit below expectations.
- Etsy is up 66% this year after its active buyers grew for the first time in two years.
- Even after the drop, Shopify costs more than four times as much as Etsy for each dollar of expected 2027 earnings.
- Etsy looks like the better buy from here. It has the same mix of profits and buybacks that has lifted eBay this year.
Shopify (SHOP) fell 6% today after its third-quarter report, while Etsy (ETSY) hit a 52-week high. Etsy is up 66% in 2026, and Shopify is now down 9%.
eBay (EBAY) has had a year a lot like Etsy’s. It’s up 38% in 2026. Its third-quarter GMV grew 15%, with a 26.3% adjusted operating margin.
Shopify’s merchants are growing sales more than three times as fast as Etsy’s sellers, so the gap between the two stocks comes down to price.
Etsy is growing again
Etsy’s marketplace sales rose 8.8% to $2.65 billion in the third quarter. Better yet, active buyers rose 1% to about 88 million over the last twelve months, the first year-over-year increase in two years.
CEO Kruti Patel Goyal wrote in her shareholder letter that she’s “increasingly confident that our business is now firmly in growth mode.”
Etsy also bought back $394.6 million of stock in the quarter. Analysts expect its normalized EPS to keep climbing through 2028:
At this morning’s price, Etsy trades at about 13x 2027 estimates. That’s cheap for a business that’s growing again with a 30.4% adjusted EBITDA margin.
Growth is still in single digits, though. Etsy expects fourth-quarter GMS to grow 5% to 7%, and marketing rose to 29.9% of revenue from 27.8% a year earlier.
TIKR tracks 31 analysts on Etsy. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Etsy, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Etsy’s Analyst Ratings
A strong quarter at a steep price
Shopify’s revenue rose 32% to $3.74 billion and operating income climbed 66%. Free cash flow of $816 million beat the $723 million analysts expected. GMV grew 29% to $119.1 billion, a bit below forecasts.
Gross profit grew 28%, slower than revenue, and the fourth-quarter outlook keeps that gap: revenue up at a low-thirties rate, gross profit at a high-twenties one.
Going into the report, analysts expected Shopify’s normalized EPS to more than double from 2025 to 2028:
That’s about 33% a year, and investors are already paying for it. At Monday’s close, Shopify traded at 74x forward earnings, right around its average of the past three years. Today’s drop leaves it at about 57x 2027 estimates, more than four times Etsy’s multiple.
I’d still take Etsy
Investors picked the right e-commerce stock this year, and today’s drop doesn’t change that. At about 13x earnings, Etsy is growing again and shrinking its share count, the same formula that’s worked for eBay. Shopify has to keep growing earnings about 30% a year just to hold its price, and a slight GMV miss knocked it down hard.
Shopify’s bull case is real. Analysts expect its earnings to grow more than three times as fast as Etsy’s. And Harley Finkelstein, Shopify’s president, says it’s building commerce into “every surface, every agent” as AI shoppers arrive.
Of course, Etsy’s buyer growth is just one quarter old. If holiday-quarter GMS comes in at the low end of that 5% to 7% outlook, this year’s rally will look a lot more fully priced.
So what is Etsy stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
