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UPDATE: Barclays Starts Etsy (ETSY) at Equalweight

August 15, 2022 3:13 AM EDT
Get Alerts ETSY Hot Sheet
Price: $94.30 -2.25%

Rating Summary:
    20 Buy, 12 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 8 | Down: 12 | New: 9
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(Updated - August 15, 2022 4:14 AM EDT)

Barclays analyst Trevor Young initiates coverage on Etsy (NASDAQ: ETSY) with a Equalweight rating and a price target of $100.00.

The analyst comments "We are initiating coverage of ETSY at Equal Weight with a $100 PT. Since 2019, Etsy has doubled its active buyer base to nearly 100m across marketplaces and grown sellers nearly 3x; GMS has seen a similar trajectory. Going forward, however, GMS growth is slowing hard as consumers pull back, and the goal of growing GMS 16-20% annually on average over time might be on pause following the substantial Covid pull-forward. We do think ETSY can outpace overall e-comm growth and revenue can grow even faster as the company offers more features to sellers, but at some point competitive pressures likely cap take rate progression. ETSY is showing some encouraging trends with new demos, international, and re-engaging lapsed buyers, and we can't rule out M&A to achieve further scale and help break the high "one-and-done mix" that plagues so many e-comm marketplaces. GM likely comes in as growth slows and reinvestment in areas such as product development may keep EBITDA margin under the long-term 30% bogey for awhile. A solid balance sheet, strong FCF generation and trough valuation (6x revs, 22x EBITDA on FY23E) bolster a bull case, but the lower growth profile and range-bound margin suggests that shares are probably priced right for the current environment."

For an analyst ratings summary and ratings history on Etsy click here. For more ratings news on Etsy click here.

Shares of Etsy closed at $119.91 yesterday.


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