Financial Analyst: Etsy Stock Investors’ Slowdown Fears Overblown

The Etsy stock has lagged recently. This event in the US stock market comes as investors feared a possible slowdown in the top line of the e-commerce company, which focuses on vintage or handmade items and craft supplies.

Despite this happening, independent financial analyst Nikolaos Sismanis advised investors to remain optimistic as he is bullish on the Etsy stock. We want to share this latest report from the US stock market.

We believe it can enlighten our readers about the Etsy stock and how it may be performing well despite various factors, especially the COVID-19 pandemic’s adverse impacts.

According to the news posted online by the New York City-based stock exchange, Nasdaq Stock Market, Sismanis described the current rates for the Etsy stock as not the most exciting.

The latest quarterly results for the e-commerce firm induced mixed feelings in analysts and investors alike. Etsy’s revenues surged 23.4 percent year-over-year in this year’s second quarter to US$528.9 million.

This figure is compared with a growth of 136.7 percent in the prior-year period. Additionally, Etsy guided for third-quarter revenues of US$500 million to US$525 million.

These numbers suggested expansion of 13.5 percent year-over-year at the midpoint, which is an even more underwhelming rate than it exhibited in the second quarter. But Sismanis cited that these facts that make investors bearish and fearful appear to be overblown.

The independent financial analyst affirmed that he remains bullish on the Etsy stock. Sismanis explained that, after all, Etsy is utterly impressive because it even posted further growth after its bizarre expansion amidst the COVID-19 pandemic.

Moreover, he remarked that Etsy’s revenues would rise in the neighborhood from 18 percent to 46 percent from 2015 to late 2019. Then, the e-commerce firm posted four consecutive quarters of triple-digit growth from the second quarter of 2020 to this year’s first quarter, peaking at 141.5 percent year-over-year in this year’s first quarter.

The huge sales boost was attributed to the increased demand for custom or handmade masks and COVID-19 pandemic-related products. Sismanis cited that the Etsy stock neither shows a mind-blowing opportunity at its present level nor a bearish one either.

He explained that his description is visible when considering that Etsy is a high-margin enterprise with a Last-Twelve-Month or LTM gross of 73.8 percent and net income margins of 22.45 percent. Sismanis remarked that the net income margins should expand fast as Etsy scales, further defending the company stock’s valuation.

We want our readers to consider Mr. Sismanis’s perspectives regarding the Etsy stock. We think he certainly made a reasonable point.

We gathered that Etsy has been very successful in capitalizing on the fast-growing e-commerce sector. Its sales have snowballed over the past few years as well.

We learned that Etsy has also managed to remain consistently profitable, unlike most hyper-growth firms that reinvest their gross profits’ majority. Thus, shares have appreciated almost tenfold since Etsy’s initial public offering or IPO back in 2015.

With all of these facts about the Etsy stock and the e-commerce company, we think Mr. Sismanis, indeed, made a justified point. We recommend our readers consider his views about what he referred to as “the bigger picture,” maintaining that the Etsy stock is still ahead despite the investors’ slowdown fears.

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