Is it too late for Etsy stock now?

that Etsy(NASDAQ:AMD) stock has really made a lot of gains since then. Since the last correction of $67.01, it has since returned to $120. Anyone who invested near the lows is happy with a solid performance.

But is it too late to bet on Etsy stock now? No, if you ask me, definitely not. It is not only related to the share price development, which is still about half below the highest level ever. No, but business and market oriented with the greater overall opportunity.

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Etsy Stock: Still a Strong Role in E-Commerce!

Behind the Etsy stock is still the online trading site of the same name, which grew strongly during the corona pandemic. As well as grow to profitability. But the decisive thing is that today we see much more here. Depop and Elo7 in particular have been part of the group for some time. Reverb, on the other hand, has been around for a few years longer. All this can be classified under the House of Brands concept, with which the management wants to roll up the market for unique, personal e-commerce platforms.

Of course, goodwill amortization has recently weighed on net income. Nevertheless, Etsy is recently in the black with an operating profit of $420 million and an EBIT of $167 million. After the write-downs, there should also be solid net results again.

Additionally, the management behind Etsy stock should continue to expect it to only scratch the top of the total addressable market. Gross merchandise volume is already more than 3 billion US dollars per year. quarter, generating revenues of more than half a billion US dollars per quarter. In the Christmas quarter, of course, correspondingly more. But the deciding factor is that the total global market is said to be in the trillion US dollar range. That means we’re just scratching the surface of the possibilities. Organic and inorganic are still very much possible in the long term.

The rating at a glance…

Etsy is now valued at a market cap of $15.2 billion. It’s not a little. But even a price-to-sales ratio of less than 7 and a 2021 price-to-earnings ratio of around 35.3 show that the valuation need not be too expensive. Especially as the highly profitable platform begins to scale in the medium term, weaker revenue growth should be enough for a re-rating.

Ultimately, we therefore see an intact growth story within e-commerce in a business-oriented way. As a result, Etsy stock still has great potential.

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Vincent owns shares in Etsy. The Motley Fool owns stock in and recommends Etsy.

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