Etsy Stock Slumps Amid Slowing Growth Concerns

Etsy Inc. shares have declined around 7% since earnings release. Investors face challenges with slowing revenue growth, which could impact its long-term viability as an investment.

Date: 28-02-2025

AI Rating: 5

Recent reports indicate that Etsy Inc. (NASDAQ: ETSY) is under pressure, as shares have dropped about 7% following the earnings announcement. **Concerns Over Growth** dominate discussions, with a significant focus on the company's slowing revenue increase. While quarterly revenue reached over $850 million, a meager growth of only 2.18% over the last year starkly contrasts the company's historical CAGR of 27.9%.

The number of active sellers has plateaued, not seeing the significant increase that characterized the previous years. In fact, a decline of 8.5% in sellers suggests the company is struggling to maintain its appeal. Notably, Gross Merchandise Sales (GMS) are down 4.4%, marking the fourth consecutive year of declining metrics. This trend raises serious questions about the value proposition Etsy offers in the current market.

Additionally, while the forward price-to-earning (P/E) ratio appears attractive at about 8x, these financial metrics are overshadowed by the broader perception of Etsy as a niche player in the e-commerce space. Stakeholders are advised to consider the potential for short-term trading opportunities rather than long-term investment strategies due to these trends. The consensus hold rating and price target forecast suggest a limited upside in the current environment.

Stocks: ETSY