Should you buy Etsy stock? (August 2023)
- 8 months ago
Etsy stock analysis. Ticker: ETSY
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At the latest share price, the company has a valuation of 9.4 billion dollars. It’s got 1.2 billion of cash on the balance sheet and 2.3 billion of long term debt so the enterprise value is 10.5 billion.
Revenue over the last 12 months is 2.7 billion with 731 million of adjusted ebitda and 660 million of free cash flow. Net income at minus 717 million has been impacted by stock based compensation and increased spending in product development.
So ETSY is valued at 3.4 times revenue, 14 times ebitda and 16 times free cash flow. The story at Etsy is really about growth going forward. The pandemic pulled forward demand and that is clearly seen in the flattening growth rates across the board.
Gross merchandise sales across the company dropped 0.6% year over year, revenue increased by 7.5% but adjusted ebitda still dipped by 1%. In fact ebitda margins have fallen from 28.3% to 26.4% and that’s despite the company raising seller fees.
Bulls might argue that Etsy is showing signs of its business stabilizing since gross merchandise sales are falling at a slower rate than in previous quarters. They might also point to stabilizing repeat buyers and a 3% increase in total active buyers to 91 million.
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Join 9000+ investors: https://www.overlookedalpha.com
At the latest share price, the company has a valuation of 9.4 billion dollars. It’s got 1.2 billion of cash on the balance sheet and 2.3 billion of long term debt so the enterprise value is 10.5 billion.
Revenue over the last 12 months is 2.7 billion with 731 million of adjusted ebitda and 660 million of free cash flow. Net income at minus 717 million has been impacted by stock based compensation and increased spending in product development.
So ETSY is valued at 3.4 times revenue, 14 times ebitda and 16 times free cash flow. The story at Etsy is really about growth going forward. The pandemic pulled forward demand and that is clearly seen in the flattening growth rates across the board.
Gross merchandise sales across the company dropped 0.6% year over year, revenue increased by 7.5% but adjusted ebitda still dipped by 1%. In fact ebitda margins have fallen from 28.3% to 26.4% and that’s despite the company raising seller fees.
Bulls might argue that Etsy is showing signs of its business stabilizing since gross merchandise sales are falling at a slower rate than in previous quarters. They might also point to stabilizing repeat buyers and a 3% increase in total active buyers to 91 million.
#investing #stocks #overlookedalpha