Product enhancements, refined search capabilities, and solid competitive advantages have led Oppenheimer to lift its rating on Etsy Inc (NASDAQ: ETSY) from "Neutral" to "Outperform," setting a price target of $90.

Based on a survey of 2,500 U.S. shoppers, the improvements are clearly showing traction, with consumers turning less to Google Search and increasingly relying on AI-driven discovery tools.

As a result, analyst Jason Helfstein raised his fiscal 2026 gross merchandise sales (GMS) growth estimate to 1%, the highest on the Street, and projects 5% GMS growth for both fiscal 2027 and 2028. The updated forecast already accounts for some market share erosion in the online handmade goods space due to new entrants.

Oppenheimer expects the global online handmade goods market to expand at a compound annual rate of 9% from 2025 through 2028. While the sector grows, Etsy is anticipated to shed 117 to 135 basis points of share in 2027 and 2028, although this analysis is limited strictly to handmade items, which represent 73% of the survey pool, whereas the company's overall product selection reaches a much broader audience.

Helfstein noted that the platform's upgraded features and AI-powered search are resonating with users, as 65% of surveyed consumers said they are "very" or "somewhat" likely to make a purchase. Additionally, 73% of buyers indicated they shop for handmade or customized products, and 88% said they visit the site directly rather than arriving through Google.

Shares of Etsy slipped 0.62% on Tuesday to close at $74. Year-to-date, the stock has gained roughly 34%, comfortably outpacing the benchmark S&P 500's 11% rise over the same stretch.