Etsy (ETSY) is a two-sided marketplace that is benefiting from solid momentum across active sellers and buyers. Furthermore, the company is optimistic about the prospects of its buyouts of Reverb, Depop, and Elo7.
In the last 18 months, a record number of buyers and sellers have come onboard the Etsy platform, prompting the company to undertake various initiatives to engage and retain them.
This is expected to boost the platform’s visibility and awareness among consumers, which, in turn, should boost its profitability and lead to a growth in gross merchandise sales in the forthcoming years. (See Etsy stock charts on TipRanks)
Needham analyst Anna Andreeva recently reviewed the developments and prospects of Etsy’s business. “We view Etsy as a unique business model that in the last few years has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories, demographics, and geographies,” noted Andreeva.
The analyst expects Etsy to record 34% year-over-year revenue growth in 2021, and 21% in 2022. However, she expects some contraction in EBITDA due to continued investments that Etsy is making to grow its business.
Moreover, the analyst also opined that Etsy’s personalization initiatives should be significant enough to drive retention. She pointed out that in the past five years, Etsy’s business in the Apparel & Accessories space has shed 18 points of market share, whereas emerging e-commerce players have gained 500 points.
Andreeva also noted that only 30% of buyers would choose Etsy to make their next purchase if given a choice, despite Etsy being the fifth-most visited e-commerce site.
Nonetheless, this drawback does not seem to bother Andreeva much, and she reiterated a Buy rating on the stock, with a price target of $250.
Wall Street consensus resonates with Andreeva’s positive stance on the stock, with a Strong Buy rating based on eight Buys and two Holds. The average Etsy price target of $221.20 indicates upside potential of 6.8%.
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
