What happened

Shares of Etsy (NASDAQ:ETSY), the online crafts marketplace, rose again in January as the stock was buoyed by a Goldman Sachs upgrade, a rising tide in the market, and reports of strong holiday sales in e-commerce. As a result, the stock finished the month up 15%, according to data from S&P Global Market Intelligence

As the chart below shows, nearly all of Etsy's gains came in the first week of the month as shares rallied following the Goldman upgrade and the bullish sales reports.

ETSY Chart

ETSY data by YCharts.

So what 

Etsy shares popped on Jan. 4, gaining 8% on several news items, including the Goldman Sachs upgrade. The stock continued to move higher from there and tacked on another 8.4% over the next two sessions.

An amethyst ring on a white background.

An amethyst ring, February's birthstone featured on Etsy. Images source: Etsy.

Goldman Sachs analyst Heath Terry hiked his rating from neutral to buy and lifted his price target of $46 to $54, as he was bullish on Etsy's decision last July to change its pricing structure, including lifting its sales commission from 3.5% to 5%. Terry noted that Etsy has promised to reinvest 80% of that incremental revenue in the business, in initiatives including marketing and improving its platforms. 

Check out the latest earnings call transcript for Etsy.

Etsy also seemed to benefit from a report from Mastercard SpendingPulse that showed that online sales in the U.S. increased 19% over the holiday season, a stronger pace than in past years. Finally, the independent-minded e-commerce company gained a broader recovery in the market as growth stocks bounced back after a sharp sell-off in December.

Now what  

Just a few days into February, Etsy got another bullish analyst note, this time from KeyBanc Partners' Edward Yruma. Yruma predicted Etsy's gross merchandise sales would increase more than 20% in the fourth quarter, and his firm's proprietary research found that spending trends accelerated 240 basis points sequentially in January.

Investors will get the full scoop when Etsy reports earnings on Feb. 25. Analysts see revenue rising 43% to $194.9 million, and earnings per share falling from $0.36 to $0.21 as it steps up its investments.