PUBLISHED Jun 27, 2022, 8:24:33 AM        SHARE


During the last quarter, investors have been risk-averse, mainly sticking to conservative investments. The decreased risk appetite owes to inflation and increasing interest rates. The unfavorable climate has reduced the valuation of some profitable investment stocks, such as ETSY.

ETSY is a well-run company and a reasonable investment for a long-term investor. The company's unique business model is increasingly taking it to the top of the game. ETSY has become the top e-commerce go-to for consumers in many categories.

Why Etsy as a top growth long stock plummeted in 2021

ETSY stock plummeted by close to 75% in late 2021. The plummet was caused by slow growth in the post-pandemic market. During the pandemic, the company's traffic and sales increased as more people shopped online.

It also made some key acquisitions, which boosted Revenue. However, things turned post-pandemic at the end of the year, when total dependence on e-commerce was reduced. Revenue by the end of last year increased by a mere 35%, compared to the 111% surge of 2020.

EBITDA margins also declined in Q1 2022, leading to low-margin Revenue. Moreover, its stock was overvalued by at least 120 times the estimated earnings in 2021. ETSY would have been impossible to sustain the overvaluation, as interest rates have significantly increased to date.

Why you should consider Etsy as an investment option

I believe most of ETSY’s stock and financial challenges are temporary. This is due to the pre-pandemic indicators. A survey conducted by the Harris poll estimated that 75% of e-commerce shoppers in America shopped for unique gifts.

It is expected that ETSY will profit from this general shopper preference, as they specialize in unique and handmade products. ETSY is more appealing to Gen Z shoppers, especially after the acquisition of Depop, which retailing second-hand clothes to early 20s shoppers.

ETSY may soon come to the top compared to its main competitors, such as Amazon, because of its hold on this particular niche. The company has a reputable engagement rate, which is critical in retaining and attracting new customers.

ETSY is yet to explore the overseas market to its full potential; therefore, there is room for growth. In 2021, 43% of its gross merchandise sales were from overseas. It will expand in Latin America and Southeast Asia in the coming years.

The general analysts' outlook for Revenue is 19% by the end of next year. The current projection ratios are more sustainable than they stood at in 2021.

Financial metrics

ETSY has a fixed cost structure that ensures net income increases at a higher rate than sales. This metric gives it a significant operating advantage. In 2015, the company reported an annual loss of $54 million.

It is impressive that good management has turned the company into the profitable enterprise it is today.

The company generates a high volume of cash because of its 'no inventory' business model. By only connecting buyers and sellers, the company frees up its capital.

Fundamental Analysis

• 11.64% return on assets against an industry average of -6.04% • A profit margin of 18.49% against an industry average of -3.74% • Return on Equity of 64.39% against an industry average of 12.41% • A Low PEG ratio indicates that ETSY is likely undervalued

However, ETSY may be more expensive than its industry peers may. This takes into account the difference between its enterprise value and EBITDA. With a ratio of 11.22, higher than most industry peers.

Growth Rating

• Earnings per share growth of 63.26%, consistently over the last five years • Expected growth of 25.90% of EPS over the next five years The projection indicates that investors will earn more as per their investment and at a very high margin. • Growth in Revenue of 15.11% in the last year and an average gain of 44.87% over the previous five years. • The projected outlook for the next five years is 17.43% for revenue growth.


The expected growth of ETSY may not be seen immediately, as investors are still unsure of the current slowdown. However, the future looks bright, as ETSY has proven how it plans to remain relevant in the coming years through metrics.

The company will likely get ahead of rival e-commerce giants as it differentiates itself with a defensible niche. By focusing on handmade and unique crafty items, ETSY will probably gain traction in the future as more people seek customized products.

Its planned expansion in South Asia and European counties such as Germany, Australia, and France shows excellent promise to tap into a new market. The company has the advantage of its ability to offer clients a unique experience.

As an intelligent investor, don’t take the current trend of ETSY stock at face value and be tempted to sell or avoid buying. The company has a feasible business plan, a stable financial base, and great returns are expected in the future. Take advantage of the current slowdown to buy and hold.


Etsy Inc
Return: -22.67%


Return: -22.67%

Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
Why Adobe is a Long Buy and Analysis of Q2 Fiscal 2022

When considering to purchase, it is wise for an investor to analyze a stock's past performance. Adobe stock has been growing steadily and consistently in the past. As expected with any stock, it has fluctuated from time to time, depending on the market factors, but the performance has been good overall.

With Oil Sky High, is Exxon a Buy?

Pain at the Pump May Tempt Investors to Grab Big Oil

Here's How You Can Pay Your Utility Bills With Sempra Energy Stock Dividend

Amid rising energy prices and the inevitable recession, the Sempra Energy Stock dividend is something you can rely on.

Why is Dominion Energy Stock Dropping? Is It Still Safe to Invest?

Dominion Energy Stock is dropping for a long time, yet its dividend has not stopped attracting investors.


NIO is a multinational automobile manufacturing company. It is a Chinese company. Its headquarter is in Shanghai China.

Dow Jones & Company

Dow Jones & Company is considered one of the world's largest business and financial news companies.


AMC (American multi-cinema) Entertainment Holding, Inc. is an American movie theater chain. AMC is one of the largest movie theater chains in the world.

Why you should invest in Middlesex Water Company

Water is life. With inelastic demand, the potential in the utility industry is inexhaustible. Therefore, investing in a water services company is a good bet. But why invest in Middlesex Water Company?

Astra Space Inc. NASA Rocket Failed to Deliver

What is likely to happen in the next 72 hours is a further bludgeoning of Astra's Stock Price. But is it still a long term opportunity?

Is Disney a Buy?

Post-Pandemic Entertainment vs Inflation/Recession


During the pandemic, Zoom experienced fast accelerated growth with spectacular earnings. Its stock traded at among the highest prices in the market. Today, pre-pandemic cultures have resumed, and the video communications growth has slowed down. Is its stock still a buy?


On May 25, 2022, Nvidia Corporation reported its first quarter fiscal 2023 earnings. The results beat stock analysts speculations especially based on the last quarter’s outlook.

Is Astra Space Inc Still a Buy After Their SpaceTech Day?

Astra's SpaceTech day shed light on Astra's significant strides into space. But is it enough to invest in the company?

Is Astra Space Inc. (ASTR) a Buy Right Now?

Astra Space Inc. is a space stock that could potentially be a big player as the space industry matures. But with the market falling, is it a good stock to consider right now?

Lockheed Martin is a Great Dividend and Space Stock

Lockheed Martin has a dividend yield of 2.5% as of Q2 2022. Let's discuss how LMT has kept a healthy dividend as a leader in space and military technologies.

Is Roblox Still a Buy in Q2 2022?

Is Roblox (RBLX) still a buy, a hold, or a sell? Let's take a look at Q1 2022 to see what's changed for Roblox.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Financial Literacy Leaders
Tom Hamilton
Wise Intelligent
Mark Robertson
Kevin Matthews II
Akeiva Ellis
Brendan Dale
Kenneth Chavis IV
Sharita Humphrey