Etsy operates a global marketplace where people can buy and sell unique goods online. Etsy can be seen as the "Amazon for artisans" and is a place people go to buy "one of a kind" special products.
- Etsy has been on my watchlist for a while. There was a lot of hype around the company during the hight of the pandemic, so I held back. But the company has proven that it's numbers go with the hype and is consistently performing.
- Etsy has a market cap of $28B which tells me it has much room to grow in the super hot e-commerce sector.
- The company has 5.2 million active sellers. Sellers are the number to follow since they will tend to be very loyal to the platform.
- According to a 2020 survey, 88% of Etsy buyers say that they find on Etsy items that they can't find anywhere else.
- Also consider that people are trying to turn away from China made products and move towards supporting artisans in their own countries.
- Etsy is focusing on new markets. Particularly - U.K., Canada, Germany, Australia, France and India, representing a $1.7 trillion addressable market opportunity.
- Recent acquisitions of Depop (2nd hand fashion) and Elo7 (Brazilian market place) are great moves in my opinion.
- I love "Platform Businesses" for their flywheel effect. More sellers create more products, bring more customers who increase total merchandise volume - all maintained with a steady spend on technology and R&D.
- P/E of around 60 is high, but not unheard of in this space.
- One of my favorite ratios to look at is the 'Return on Equity' = ROE. Simply put this shows the return the company make on it's market cap, excluding debt. Etsy's ROE is a fantastic at 91.44%
- CEO Josh Silverman is very impressive. Has previously served at American Express, was CEO of Shopping.com and Skype.
- Etsy is part of my E-commerce position which includes Amazon, Pinterest, Riskified, Berkshire Grey, Fiver and Amazon.
No comments:
Post a Comment