Etsy has made headlines for all the wrong reasons in 2022. The company’s stock had a monumental 2021, reaching an all-time peak of nearly $300. Things haven’t been favorable since then. The stock has steadily declined through the year, trading for approximately $86.
Etsy is an online E-commerce retail marketplace that caters to artisans. The company was heralded as the go-to pandemic play by many experts and investors as the company’s stock continued rising. However, perception seems to have flipped.
A Brief History of Etsy’s Stock
Etsy has been around for a long time. It initially came to fruition in 2005 when founders Robert Kalin, Chris Maguire, Haim Schoppik, and Jared Tarbell devised an idea for an online marketplace meant for crafts and artisanal products.
The online E-commerce marketplace debuted on the NASDAQ stock exchange on April 16, 2015, with an initial public offering. The company’s shares were priced at $16. The IPO was extremely successful, closing at twice the share price. Then, the company’s stock consistently underperformed for a while before picking up steam in 2018. The stock’s upward trajectory persisted until 2020, when the pandemic hit.
The pandemic was a lifeline for many E-commerce businesses, accelerating their revenue because people were cooped in their homes because of government-imposed lockdowns and social distancing regulations. Etsy’s situation was no different. The pandemic proved to be a blessing in disguise for the company, forcing its stock to lift off into the stratosphere. Etsy began gaining ground. Each day marked a further increase in the company’s stock. By late 2021, the company had reached an all-time peak of nearly $300. Investors and traders were clamoring to get their hands on Etsy’s stock because the company showed no signs of slowing down. However, things took a turn when the pandemic started to subside. As social distancing regulations and government-imposed lockdowns began easing, more people found themselves in malls and shopping complexes. The company’s stock began to reverse, declining steadily. By May 2022, the company’s stock was worth approximately $82 per share.
Etsy’s Stock in 2022
Experts and analysts have been divided on Etsy’s stock in 2022. Some consider the company’s growth during the pandemic a flash in the pan, citing the pandemic as the perfect storm for the company to take off. However, most remain optimistic about the stock’s outlook despite having price targets all over the board. Jeffries Financial, for instance, considered the stock worth purchasing but lowered the price objective to $280. On the other hand, Morgan Stanley reduced the company’s price target to $113 in May 2022.
It’s easy to see why analysts remain positive on Etsy’s stock. The company’s first-quarter revenue of 60 cents per share slightly exceeded expectations. The company’s active user base increased 4.9 percent over the previous quarter. While the company’s merchandise sales fell by two percent, most were happy to chalk it down to normalization to pre-pandemic levels. The company’s revenue also grew by 5.2 percent to $579 million. Unfortunately, this was the first single-digit increase in revenue in the company’s history.
In short, Etsy remains a potentially profitable stock. However, investors and traders must proceed cautiously.
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