While the broader market fumbled for a fourth-straight day, shares of Etsy, the ecommerce firm focused on vintage and handmade goods, tacked onto massive year-to-date gains that are on track to best all but one other stock in the S&P 500; here’s what Wall Street’s saying about the online craft-seller’s momentous rise.
Shares of Etsy jumped more than 4% Tuesday, landing the stock at an all-time price high of roughly $197 per share and pushing year-to-date gains to an eye-popping 340%–behind only new constituent Tesla’s 675% gain in the S&P.
The Tuesday boost comes one day after Loop Capital analyst Laura Champine raised her Etsy price target to $210–Wall Street’s most bullish Etsy price forecast–from $165, saying “the migration to ecommerce and to the Etsy platform will accelerate longer-term revenue growth.”
Another bullish analyst, RBC Capital’s Shweta Khajuria told Yahoo! Finance on Tuesday that she’s confident Etsy’s recent surge in demand is “sustainable” and “here to stay” despite already slowing sales of face masks on the firm’s platform, a huge driver of Etsy’s stock growth during the pandemic.
“Even without masks, Etsy is actually seeing an elevated and consistent demand from consumers,” Khajuria said, adding that increased traffic on Etsy’s website and app in October and November could indicate that the firm’s on track for a strong fourth quarter.
The average of 17 analyst price targets for Etsy shares is about $167 based on current fundamentals; two-thirds of analysts have a buy or strong buy rating on the stock, and only one has a sell rating.
The ProShares Online Retail ETF, whose top holdings include Amazon, Alibaba, Chewy and Etsy, respectively, has surged more than 100% this year, compared to 13% and 41% for the S&P and Nasdaq, respectively.
“This has been an exceptional year for Etsy,” Khajuria said Tuesday. “Nobody thought that Etsy would get to a gross merchandise sales level of $10 billion in this year alone, which is almost double of last year. Buyer retention, new buyer growth [and] buyer frequency all trending in the right direction with elevated levels of ecommerce give us conviction that Etsy can see sustainable gains.”
Etsy nabbed a 73% increase in online customer spending on Cyber Monday this year–better than growth of 43% and 19% for Target and Amazon, respectively, according to data from Edison Trends reported by the Wall Street Journal.
More than $600 million of the roughly $5.3 billion sold on Etsy’s platform in the second and third quarters came purely from face masks. That helped more than double the volume of goods sold on Etsy’s platform in the third quarter, as compared to the same period last year. Without face masks, Etsy still posted roughly 90% year-over-year growth in sales on its platform. Of the firm’s $450 million in revenue last quarter, more than $340 million came from the commission paid by Etsy’s merchants (the rest came from optional services those merchants can tap). Since its launch in 2005, approximately 138 million people have purchased from Etsy, including nearly 70 million in the last year, about 55% higher than one year ago.
Wall Street’s lowest Etsy price target comes from Morgan Stanley analyst Lauren Cassel, who’s warned that Etsy’s booming pandemic growth could be “as good as it gets” for the firm. She reiterated an underperform rating and gave Etsy a $74 price target last month.
The pandemic has boosted the likes of Amazon, Shopify and Stitch Fix to massive new highs this year, but Etsy’s been a particularly bright spot with S&P Global deciding to add the firm to the S&P 500 in September, very notably passing up on Tesla at the time.
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