Shares of Etsy (ETSY) are on the rise on Tuesday after RBC Capital and Goldman Sachs have raised their price targets on the stock to $117 and $120, respectively. RBC Capital analyst Shweta Khajuria sees acceleration in active buyer growth, frequency growth, and offsite ads as potential catalysts to sustain Etsy's revenue growth. Meanwhile, her peer at Goldman Sachs continues to see meaningful upside to consensus estimates as the company drives incremental buyer frequency through investments in product and marketing.

'CRAFTING' ITS WAY HIGHER: RBC Capital analyst Shweta Khajuria raised the firm's price target on Etsy to $117 from $79, while keeping an Outperform rating on the shares in the wake of "deep-dive bottom-up analysis, proprietary survey work, and positive industry data points." The analyst sees acceleration in active buyer growth due to secular tailwinds, frequency growth from product improvements, and offsite ads as potential catalysts to sustain Etsy's revenue growth. The company should acquire new buyers at a "greater-than-historical rate" going forward as it benefits from secular tailwinds, accelerating platform traffic growth and growing marketing efforts, she contended.

'CONTINUED MOMENTUM': On Monday, Goldman Sachs analyst Heath Terry also raised the firm's price target on Etsy to $120 from $88, while keeping a Buy rating on the shares. The analyst cited constructive app download trends globally and a "significant opportunity" to capitalize on the surge in e-commerce adoption. As traditional retail remains less attractive to consumers and Etsy creators adapt to rapidly evolving needs, Terry continues to see "meaningful upside" to consensus estimates as the company drives incremental buyer frequency through investments in product and marketing.

With a nearly two-times faster growth rate and better long-term margin than peers, the analyst continues to believe the risk/reward in owning Etsy is favorable. Beyond the second quarter, Terry believes Etsy's incremental investments in advertising and product will carry strong returns while the company also benefits from accelerating secular tailwinds and pressures on offline retail.

PRICE ACTION: In afternoon trading, shares of Etsy have jumped over 7% to $103.13.