Etsy Is A Falling Knife Worth Catching

Sep. 15, 2023 12:26 PM ETEtsy, Inc. (ETSY) StockETSY8 Comments

Summary

  • Despite being a consensus "Buy" on Wall Street, Etsy stock has declined by ~40% year-to-date amid a challenging macroeconomic environment.
  • The company's top-line growth has slowed down after a surge in demand during the pandemic. And Etsy's M&A activity has failed to boost growth.
  • Etsy's stock remains stuck in a downtrend; however, robust free cash flow generation, capital return program and reasonable valuations render Etsy investable at current levels.
  • I rate Etsy a "Buy" in the $60s, with a strong preference for slow, staggered accumulation over the next 12-18 months.
  • Looking for more investing ideas like this one? Get them exclusively at The Quantamental Investor. Learn More »
Etsy IPO Opens On Nasdaq

Paul Zimmerman

Introduction

Etsy, Inc. (NASDAQ:ETSY) is a fallen pandemic darling that can't seem to catch a bid from investors despite being a consensus "Buy" among Wall Street Analysts.

An analyst upgrade with a $100 price target from Wolfe Research and

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I am Ahan Vashi, a seasoned investor with professional background in equity research, private equity, and software engineering. I currently serve as the Chief Financial Engineer at The Quantamental Investor, a community pursuing financial freedom through bold, active investing with proactive risk management.

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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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