I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
As an investor checking into popular trends, you may have heard of Etsy, an online shopping site where artisans generally sell handmade goods. The question is: is Etsy stock a good investment?
How to buy shares in Etsy
- Open a stock trading account - We recommend using Webull as it offers free stocks when you sign-up.
- Confirm your payment details - Add your payment method and fund your account.
- Research the stock - Search for the stock by name or ticker symbol - ETSY.
- Decide the amount of shares - Now it is time to decide how many shares you want to buy of Etsy.
- Purchase shares of ETSY - Buy the amount of shares you want with a market order or limit order.
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About Etsy, Inc.
Etsy, Inc (listed as ETSY on NASDAQ) is an online marketplace where creators, artists, and independent designers can make and sell their products.
Etsy.com is the primary platform out in the world that connects creators directly to consumers. Etsy’s focuses on handmade, custom, or vintage items.
For instance, most of the best-selling items on the site are handmade jewelry. Etsy focuses on artist work and less on commercially-made products, though there has been an increase in third-party sellers.
Like other e-commerce platforms, ETSY has seen growth throughout the pandemic, but has dropped 66% in 2022 after its all-time high in November 2021.
With the stock price of such a popular and growing company so low, is now the time to buy?
Should I Buy Etsy Stock?
The appeal of homemade items has grown in past years, especially as the COVID-19 pandemic shed light on small businesses. But what are the benefits and drawbacks, and what is in store for Etsy's predicted future?
Here, we break down the pros and cons of investing in Etsy Inc. We'll investigate a bullish case, a bearish case, and a final verdict.
Etsy Stock Price Today
Etsy has been a good investment for the past five years and has maintained a stable return on capital. Etsy may be a good investment if these trends continue.
In addition, its high performance in the pandemic showed how the company reacts positively to challenges and adapts to a changing market.
Etsy’s performance in making a niche market mainstream says a lot about the company’s consistency and staying power. Here are a few reasons to consider investing in Etsy:
- You get a low price for typically valuable stock. Etsy has performed well over the past five years and could return to a high valuation. It could be worth seeing if their trends continue once the market stabilizes.
- Etsy is poised to favorably attract attention in 2022. Etsy is making moves to drive more profit into its already successful business plan. Recently sale promotions and increased charges to seller transaction fees on the website could pay off in the future.
- Likely to be a lucrative long-term investment. Despite dropping the valuation of Etsy from a previously optimistic stance earlier in the year, an analyst from the investment bank maintained that it is likely still a long-term investment with a positive trajectory. This is due to Etsy’s previous patterns of growth in a niche market.
It’s always impossible to predict when a company has reached its bottom value, but Etsy’s low trading price makes it an attractive investment at the moment.
Because the stock has dropped 66% in the past year, it’s now the lowest cost it has been in quite some time, and now may be the best time to buy.
Etsy is in a stable position to move forward. Etsy markets itself (and delivers) on a source of uniqueness and customization. These are increasingly common trends in consumers, so it's highly unlikely Etsy’s service will suddenly become undesirable.
The lure of handmade jewelry, home decor, and niche hobbies in a world of mass production is too strong. Etsy is a profitable company by itself, but there are always risks to investing.
Next, we discuss the drawbacks to investing in Etsy.
The bear case for the decision to buy Etsy or not is based primarily on broader market trends outside of the company’s decision-making and consumers’ feelings towards the brand.
Between war, inflation, and supply chain issues, there are numerous reasons not to buy Etsy. Here are a few reasons to be cautious about buying Etsy as a near-term investment.
- Pessimistic forecast by executives. Despite Etsy’s high performance in Q1, executives expect a weaker second quarter with single to high double-digit losses. This reasoning is tied to the bullet points below.
- Declining macroeconomy. Between inflation, war, and supply chain issues, consumers are less likely to spend. In addition, the pandemic lockdowns that first inspired Etsy’s growth in the past few years are ending, and online spending is expected to decrease.
- Soft Market trends. According to Investopedia, a soft market is an out-of-balance supply and demand market that puts more pressure on the sellers to compete for buyers. In the case of most businesses, this could force them to lower prices and result in less overall profit.
In general, the risk in buying Etsy is not specific to the company but the marketplace as a whole. Most investments at the moment are risky, not just Etsy.
There is always a certain degree of risk in investing. With rapid economical changes and challenges continuing to develop, Etsy is not an exception.
Ety’s massive dip in 2022 may be alarming to investors. However, this could be a case of overreacting to outside market changes.
Either way, the choice to buy ETSY or not depends on your desired speed of return. Needham analyst Anna Andreeva, who recently dropped the rating of Etsy (mentioned above), still believes the stock will be an advantageous long-term investment.
“Longer term, we like Etsy’s unique business model that in the last few years has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories, demographics, and geographies,” writes Anna Andreeva.
Etsy executives quoted a similar expectation in Etsy prices. Despite the potentially weak upcoming second quarter, they said, Etsy could still remain a solid long-term investment.
Etsy has a strong niche that they have done well with in the past, and could continue to improve. Most analyst ratings hover between “Hold” and “Buy."
If you are a risky investor, this could be an enticing prospect. With the decreased evaluation of Needham in mind, Etsy is likely too risky of a short-term investment at the moment to justify its low price.
As a final verdict, buy Etsy shares if you are ok with a long-term investment. The current low price of the stock, compared to its performance in the past, makes it seem like an overall good deal that investors should pay attention to.
So, if this profile fits you, go and stake your claim! If you are aiming for near-term gains, don’t buy Etsy. The current marketplace is too volatile, and the risk isn’t worth it.
Should you invest $1,000 in Etsy right now?
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