BROOKLYN, N.Y., Feb. 5, 2025 /PRNewswire/ -- Etsy, Inc. (Nasdaq: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced that effective February 3, 2025, Etsy granted an inducement restricted stock unit award consisting of 99,593 shares of Etsy's common stock to Lanny Baker, who joined Etsy as its Chief Financial Officer effective January 1, 2025.The awards were granted under the Etsy, Inc. 2024 Inducement Plan ...

Our Purpose: To make the world smarter, happier, and richer. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation. ...

Growth stocks soared last year as investors piled into high-potential players like artificial intelligence (AI) companies. In fact, these stocks led the S&P 500 (^GSPC 1.83%), the Nasdaq Composite (^IXIC 2.45%), and the Dow Jones Industrial Average (^DJI 1.65%) each to a double-digit gain for 2024 -- they rose 23%, 28%, and 12%, respectively. Since we're in a bull market, this isn't too surprising: Bull markets generally are favorable for companies focused on growth, as the environment makes it easier for t ...

-       Kruti Patel Goyal named to newly-created role of President and Chief Growth Officer-       Lanny Baker to join as Chief Financial Officer-       Brad Minor promoted to Chief Marketing OfficerBROOKLYN, N.Y., Dec. 5, 2024 /PRNewswire/ -- Etsy, Inc. (NASDAQ: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced several Executive Team changes.These updates are meant to strengthen Etsy's ability to further ...

Core Viewpoint - Etsy's third-quarter 2024 earnings report showed mixed results, with revenue growth but a significant earnings miss, raising questions about future performance and market expectations [2][4][13]. Financial Performance - Q3 2024 revenues increased by 4.1% year-over-year to $662.4 million, surpassing the Zacks Consensus Estimate by 1.31% [2] - Q3 2024 earnings per share were 45 cents, missing estimates by 16.67% and reflecting a 29.7% year-over-year decline [2] - Gross merchandise sales (GMS) totaled $2.92 billion, down 4.1% year-over-year, missing the consensus estimate of $2.97 billion [7] Revenue Breakdown - Marketplace revenues were $476.1 million, accounting for 71.9% of total revenues, up 3.3% year-over-year, driven by payment fee revenues and new seller setup fees [4] - Services revenues reached $186.3 million, representing 28.1% of total revenues, with a year-over-year increase of 6.2% [5] User Metrics - Active buyers increased by 0.7% year-over-year to 96.7 million, falling short of the consensus estimate of 97.2 million [6] - The active seller base decreased by 3.2% year-over-year to 8.5 million, also missing the consensus mark of 9.7 million [6] Operating Expenses - Total operating expenses rose by 8.6% year-over-year to $389.95 million, with marketing expenses increasing by 22.1% to $196.5 million [8] - Operating income was reported at $86.8 million, down from $88.6 million in the prior-year quarter [10] Balance Sheet - Cash and cash equivalents increased to $818.94 million as of September 30, 2024, up from $759.21 million at the end of the previous quarter [11] - Long-term debt remained unchanged at $2.29 billion [12] Future Guidance - For Q4 2024, Etsy expects a take rate of 22.3% and anticipates GMS to decline in a low to mid-single-digit percentage range year-over-year [13] - The adjusted EBITDA margin is projected to be between 28-29% [14] Market Sentiment - There has been an upward trend in estimates for Etsy, with the stock currently holding a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [15][17]

Summary of Etsy, Inc. Conference Call Company Overview - **Company**: Etsy, Inc. (NASDAQ:ETSY) - **Date**: November 25, 2024 - **Participants**: - Josh Silverman - CEO - Rachel Glaser - CFO - Bernie McTernan - Needham Key Points Industry Insights - **E-commerce Trends**: E-commerce is growing, but the growth is primarily in everyday essentials at discounted prices, leading to pressure on discretionary products [4][9] - **Consumer Sentiment**: Consumers feel financially pressured despite positive GDP growth, impacting discretionary spending [9][10] Company Performance and Strategy - **Gross Merchandise Sales (GMS)**: There has been volatility in GMS, with opportunities identified in both active buyer growth and GMS per buyer [4][6] - **Active Buyers**: Only about one in three women and one in ten men in the U.S. have purchased on Etsy in the last year, indicating significant potential for new buyer acquisition and re-engagement of 100 million lapsed buyers [6] - **Customer Experience**: Etsy is focusing on enhancing customer experience by improving search results and showcasing diverse product offerings [5][12] Gifting and Seasonal Opportunities - **Gifting Market**: The average American spends approximately $1,600 annually on gifts, with Etsy capturing only 2% of that market. There is a significant opportunity to increase market share in gifting [20] - **Gift Mode Features**: New features have been introduced to enhance the gifting experience, including gift teasers and improved shipping options [23][25] Product and Technology Enhancements - **Search and Discovery**: Improvements in search technology using neural networks to enhance relevance and reduce the "tyranny of choice" in search results [45][49] - **Seller Visibility**: A new Q-score system has been implemented to rank sellers based on quality metrics, improving the buyer experience [34][36] Financial Performance - **Take Rate Expansion**: Etsy's take rate increased by 130 basis points without negatively impacting seller margins, indicating a balanced approach to revenue growth [70][72] - **Etsy Ads**: The advertising platform is a key driver of revenue, with ongoing improvements to enhance return on ad spend (ROAS) for sellers [62][66] Capital Allocation and Future Outlook - **Free Cash Flow Utilization**: Etsy is focused on organic investments, share repurchases, and potential M&A opportunities, with a strong balance sheet to support these strategies [78][81] - **M&A Success**: The acquisition of Depop has been successful, enhancing Etsy's presence in the apparel category and reaching younger demographics [81] Challenges and Risks - **Market Competition**: Etsy is avoiding a price war in the marketplace, focusing instead on value and quality differentiation [12][10] - **Tariff Exposure**: The impact of potential tariffs on imports from China is minimal, as Etsy's inventory from China is de minimis [60][61] Conclusion Etsy is navigating a challenging macroeconomic environment by focusing on enhancing customer experience, expanding its gifting market, and leveraging technology to improve search and discovery. The company is well-positioned for future growth with a strong balance sheet and strategic focus on organic investments and potential acquisitions.

I recently joined The REIT Forum and if you are looking for more investment ideas like this one, get them exclusively at The REIT Forum with access to our subscriber only portfolios.I last wrote about Etsy, Inc. (NASDAQ: ETSY ) in August, where I upgraded my rating from “hold” to “buy” as I believed that an improving macroeconomic environment and a robust product roadmap should setAmrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for the family fund. T ...

Core Insights - Stocks removed from major indexes like the S&P 500 often lose appeal, particularly among professional investors, leading to significant price declines [1] - Historical data indicates that these stocks can outperform their indexes by five percentage points annually over the next five years after removal [2] Group 1: Etsy - Etsy generates 82% of its revenue from sellers identifying as a "business of one," offering a unique product range compared to larger retailers [5] - The company experienced a sales surge of over 100% during the pandemic, but growth has since slowed to single digits, resulting in an 81% decline from all-time highs [6][3] - Currently, Etsy trades at 11 times free cash flow (FCF), near historical lows, and only 15 times FCF when accounting for stock-based compensation [7] - A reverse discounted cash flow (DCF) analysis suggests Etsy needs only 4% annual FCF growth over the next decade to be an attractive investment [8] - In Q3, Etsy added 3 million app downloads, indicating potential for growth, as buyers through the app have a 40% higher lifetime value [9][10] - With a 22% FCF margin, Etsy has the capacity to buy back shares, having reduced its share count by 4% annually over the last four years [11] Group 2: WK Kellogg - WK Kellogg, known for brands like Frosted Flakes and Special K, was cast aside after its spinoff from Kellanova in 2023, trading 25% below its highs [12][13] - The company trades at a low EV-to-EBITDA ratio of 7, significantly cheaper than peers like General Mills and Post Holdings [14] - Kellogg is guiding for mid-teens EBITDA margins by 2026, following a $500 million investment to modernize its supply chain, which could lead to substantial undervaluation if successful [14] - The company raised its adjusted EBITDA growth guidance for 2024 to 5%-6% and increased its adjusted EBITDA margin to 10.5% for the first three quarters of 2024, indicating early progress [15] - Despite modest industry growth projections of 2% annually through 2029, Kellogg's current valuation suggests it is priced for minimal growth, presenting potential for market-beating returns [16][17]

Core Viewpoint - Etsy presents a compelling investment opportunity in the niche e-commerce sector, particularly as online shopping continues to grow globally, despite traditional retail still dominating the market [1][2]. Group 1: Differentiated Merchandise - Etsy has successfully carved out a niche in the e-commerce space by focusing on unique, handcrafted, and vintage items, contrasting with Amazon's mass-market approach [4][5]. - A survey indicated that 83% of Etsy buyers believe the platform offers items that cannot be found elsewhere, highlighting its unique value proposition [4]. Group 2: Two-Sided Network Effects - Etsy benefits from strong two-sided network effects, with 96.7 million active buyers and 8.5 million active sellers, creating a valuable marketplace for both parties [7][8]. - The global nature of Etsy's network allows buyers and sellers from different locations to connect, making it difficult for competitors to replicate its scale and reach [8]. Group 3: Current Valuation - Etsy's stock experienced a significant increase of 2,160% over five years leading to its peak in November 2021, outperforming the Nasdaq Composite Index during the same period [9]. - The company reported $2.9 billion in gross merchandise sales last quarter, which was lower than two years ago, contributing to a current share price that is 82% off its all-time high [10]. - The stock is currently trading at a forward price-to-earnings (P/E) ratio of 12, representing over a 50% discount compared to the broader S&P 500, making it an attractive option for potential investors [11][12].

Core Insights - Etsy's CEO, Josh Silverman, emphasized the essential role of artificial intelligence (AI) in the company's operations, stating that the platform could not function without it [2][3] - Etsy has evolved into a multi-billion-dollar e-commerce platform with seven million sellers and over 90 million buyers, facing competition from various sources, including major e-commerce giants and traditional retail [2][3] - The company has faced challenges from its sellers regarding increased commission rates and the introduction of AI-generated products, leading to protests and internal debates [4][8] Company Overview - Founded in 2005, Etsy initially focused on handmade goods but has faced scrutiny over the authenticity of its offerings [7] - The platform's growth has led to a shift in competition, with AI becoming crucial for product management and search optimization [2][3] - Silverman noted that while most sellers are artists rather than businesspeople, the company aims to support their sales efforts [6][10] Seller Relations - In 2022, Etsy raised its commission from 5% to 6.5%, which led to protests from sellers who temporarily ceased operations to express their dissatisfaction [4][5] - Despite the protests, Silverman highlighted that 99.5% of sellers did not participate in the strike, indicating a divide in seller sentiment [6] - The company has implemented new guidelines to address concerns over AI-generated products, allowing them while managing the quality of listings [8] Leadership Perspective - Silverman, who became CEO in 2017, has a background in technology and venture capital, and he aims to align the interests of the company with those of its sellers [9][10] - He believes that the company's growth can benefit all stakeholders, stating, "We make the pie bigger for everyone" [10][11]