Risk/Reward Rating: Negative
Etsy operates two-sided online marketplaces making it one of the big winners when the COVID lockdowns created heavy demand for online shopping. The surge in demand has created difficulties looking forward. Growth crested in Q1 of 2021 with 140% revenue growth over last year. The forecast for the current quarter is for much more subdued yet respectable revenue growth of 15-25%.
Catering to sellers of unique and creative goods has allowed the company to carve out a niche in the retail landscape which has been supplemented by acquisitions. For example, Reverb, was acquired in 2019 and is a marketplace for used and vintage musical instruments. These unique products may be susceptible to greater volatility as life returns to normal post COVID.
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