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Etsy Inc ETSY

Morningstar Rating
$67.06 −1.38 (2.02%)
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Company Report

Value Orientation Poses Stout Near-Term Headwinds, but We Like Etsy's Long-Term Positioning

Etsy has carved out an interesting competitive niche, jockeying for e-commerce wallet share across a variety of heterogeneous verticals in the long tail of unbranded products. The firm’s marketplace properties—Etsy, Reverb, and Depop—all target non-commoditized inventories, generate commissions on third-party, peer to peer sales, and strive to create a “treasure hunt” experience around a unique, customizable, and consequently less price elastic product suite. The firm's core "Etsy" marketplace accounts for roughly 90% of consolidated gross merchandise volume, or GMV.

Price vs Fair Value

ETSY is trading at a 51% discount.
Price
$68.41
Fair Value
$426.00
Uncertainty
Very High
1-Star Price
$348.00
5-Star Price
$84.00
Economic Moat
Cxk
Capital Allocation
Pswshwkt

Bulls Say, Bears Say

Bulls

Etsy's investments in its star seller program, purchase protection, and shipping time estimates should help improve platform trust and may allow the firm to move upmarket toward inventory with higher average prices.

Bears

Without many high frequency items on its marketplace, Etsy lacks the natural traffic draw that larger e-commerce peers like Amazon command and is commensurately more sensitive to cyclical factors.

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Trading Information

Previous Close Price
$68.44
Day Range
$66.9668.19
52-Week Range
$58.24105.13
Bid/Ask
$67.02 / $67.08
Market Cap
$7.95 Bil
Volume/Avg
715,917 / 3.9 Mil

Key Statistics

Price/Earnings (Normalized)
27.87
Price/Sales
3.50
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
7.20%

Company Profile

Etsy operates a top-10 e-commerce marketplace operator in the U.S. and the U.K., with sizable operations in Germany, France, Australia, and Canada. The firm dominates an interesting niche, connecting buyers and sellers through its online market to exchange vintage and craft goods. With $13.2 billion in 2023 consolidated gross merchandise volume, Etsy has cemented itself as one of the largest players in a quickly growing space, generating revenue from listing fees, commissions on sold items, advertising services, payment processing, and shipping labels. As of the end of 2023, the firm connected more than 96 million buyers and 9 million sellers on its marketplace properties: Etsy, Reverb (musical equipment), and Depop (clothing resale).
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Small Core
Total Number of Employees
2,420

Competitors

Valuation

Metric
ETSY
EBAY
SHOP
Price/Earnings (Normalized)
27.8712.26102.63
Price/Book Value
4.2010.63
Price/Sales
3.502.7413.75
Price/Cash Flow
13.2010.97129.59
Price/Earnings
ETSY
EBAY
SHOP

Financial Strength

Metric
ETSY
EBAY
SHOP
Quick Ratio
2.032.266.86
Current Ratio
2.212.446.99
Interest Coverage
19.2914.32−13.00
Quick Ratio
ETSY
EBAY
SHOP

Profitability

Metric
ETSY
EBAY
SHOP
Return on Assets (Normalized)
23.14%10.91%8.90%
Return on Equity (Normalized)
40.21%11.41%
Return on Invested Capital (Normalized)
31.25%16.36%8.15%
Return on Assets
ETSY
EBAY
SHOP
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