Etsy: New Risks Have Emerged, But There Are Still Reasons To Stay Optimistic

Gary Alexander
31.2K Followers

Summary

  • In losing 60% of its value year to date, Etsy has given up all the gains it has made since the pandemic.
  • In spite of this, relative to pre-pandemic times, the business has more than doubled.
  • A seller fee increase to 6.5% was recently implemented with little impact to overall churn.
  • Declining GMS and rising costs are certainly issues, but Etsy's <5x forward revenue valuation is an appropriate hedge for those risks.

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When we look at the breathtaking losses that many tech stocks have suffered this year, we find that many companies have lost the entirety of the gains they have made since the start of the pandemic. And as rational investors, we

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This article was written by

31.2K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ETSY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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