Workflow
2 Stocks Down 59% and 34% to Buy and Hold
ETSYEtsy(ETSY) The Motley Fool·2025-02-24 17:00

Group 1: Etsy - Etsy has experienced a significant decline in stock price, down 59% over the past three years, attributed to economic challenges and increased competition [2][3] - The company's financial performance has been poor, with revenue growth significantly down and earnings unimpressive [3] - Despite the sell-off, Etsy's shares are trading at a forward price-to-earnings ratio of 10.5, which is considerably lower than the consumer discretionary industry average of 28.5, indicating a potentially attractive valuation [5] - Etsy benefits from a network effect, where the presence of more merchants attracts more buyers, helping maintain its competitive position in the vintage and handmade goods market [6] - The company has only captured 2% of its addressable market, valued at over 500billion,suggestingsubstantialgrowthopportunitiesinthee−commercesector[7]Group2:ExactSciences−ExactSciencesspecializesincancerdiagnostictests,withitsleadingproduct,Cologuard,beinganoninvasivetestforcolorectalcancer,whichhasalargeuntappedmarketintheU.S.withabout60millioneligiblepatientsunscreened[8]−Thecompanyhasfacedchallengesduetoincreasedcompetition,particularlyfromGuardantHealth′sShieldbloodtest,andremainsunprofitable[9][10]−RecentdevelopmentsarefavorableforExactSciences,includingtheclearanceforanext−generationCologuardthathasahighersensitivityrateof93.9500 billion, suggesting substantial growth opportunities in the e-commerce sector [7] Group 2: Exact Sciences - Exact Sciences specializes in cancer diagnostic tests, with its leading product, Cologuard, being a noninvasive test for colorectal cancer, which has a large untapped market in the U.S. with about 60 million eligible patients unscreened [8] - The company has faced challenges due to increased competition, particularly from Guardant Health's Shield blood test, and remains unprofitable [9][10] - Recent developments are favorable for Exact Sciences, including the clearance for a next-generation Cologuard that has a higher sensitivity rate of 93.9% compared to Shield's 83.1%, which may help maintain market share [11] - The new Cologuard is also 5% cheaper to manufacture, which could reduce expenses and improve profitability [12] - Exact Sciences reported total revenue of 2.76 billion for 2024, a 10% increase from the previous year, and plans to launch two additional cancer tests, which may enhance revenue growth [12][13]