Have you ever dreamt about a watch with Spiderman’s webs instead of hands? About a toy bear with rocket launchers instead of arms? Or maybe about a painting where Elon Musk is fighting against a human-like Tesla rebelling against its creator? All these things can probably be purchased on Etsy.
Well, maybe not all of them, but in such a case feel free to create them, then sell on Etsy and make a profit. Another way to make money from Etsy is to buy (or sell) its shares – let’s try to find out what the future holds for them.
Etsy is a large online marketplace that offers different kinds of handmade products and hobby goods – from bedroom furniture to ceramics and from onesies to jewelry. It’s like Amazon, except it specializes in hand-crafted stuff.
The internet retailer had a really strong growth during the Covid-19 pandemic. In spring of 2020, the company’s shares were worth nearly $30, and at the end of 2021 their price was almost ten times bigger, nearly $300. Just like Zoom in the marketplace universe. And of course, it was impossible to predict the pandemic and its consequences – but some significant market events can be foreseen. That’s why traders and investors use various trading tools, for example economic calendar – it keeps you on top of all the major economic events.
As you can see on the chart, the closer we were to the end of the pandemic, the less impressive figures investors saw on their screens. However, lots of market participants still believe in Etsy and consider it a lucrative company that has room for growth.
The financial report of Q4 2022 proves that these hopes are not idle. Etsy showed double-digit revenue growth. The company’s take rate increased much higher than expected. Also, for reference, in Q4 2022, sales volume rose by 144% in comparison to the pre-pandemic level.
Plus, Etsy is actively working on enhancing its platform features. For example, customers got a purchase protection program to prevent scam sellers.
If you are ready to push a Buy button, we also have several facts which could convince you otherwise. Firstly, the marketplace was a king of the pandemic, but those times (we hope) will never come back. It means that people will spend more time outdoors and in offline stores – therefore, the crazy demand is unlikely to return.
Moreover, one of the most popular categories on Etsy during the pandemic used to be furniture and home decor. But in the crisis we find ourselves in, people are buying new apartments and houses less often – so these items on Etsy are not much-needed now.
Despite the drawbacks, most analysts still find Etsy a good long-term investment. The consensus forecast is +27% for the next 12 months.
Just don’t forget that the stock market is more complicated than a list of analyst forecasts with Buy and Sell marks. You need to do your own research – that’s the only way to be a successful investor and trader.