Etsy (ETSY - Free Report) is an online marketplace that has seen its stock price surge during the coronavirus, as it benefits from the stay-at-home environment. The firm has also sold millions of masks on its e-commerce platform recently. So the question now is should investors still buy Etsy stock at its new highs?
Etsy is an e-commerce marketplace that allows people and small businesses to sell everything from clothing and jewelry to art and décor. The firm went public back in 2015 and its shares have soared a whopping 1,200% since the start of 2016.
More recently, Etsy shares are up 240% since the market’s March 23 lows and 150% in 2020 to destroy Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) , eBay (EBAY - Free Report) , and other stay-at-home standouts. ETSY stock currently rests right near its recent highs of around $115 a share. Despite the climb, Etsy trades at a discount compared to its own two-year highs at 10.3X forward 12-month sales, against 11.1X.
In the first quarter, ended on March 31, the e-commerce firm’s sales jumped 35%, with active sellers up 26% and buyers up 16%. On top of that, Etsy said it sold 12 million masks in April alone, worth $133 million or roughly 10% of total gross merchandise sales in Q1. This could spell great news for Etsy as masks might be needed for a long time now and it may encourage more customers to shop for other items on its platform.
Looking ahead, our Zacks estimates call for Etsy’s Q2 sales to soar 81%, with fiscal 2020 projected to pop 45% to reach $1.18 billion. This would represent its largest growth as a public firm and come on top of 2019’s 36% sales growth.
Meanwhile, its adjusted Q2 earnings are projected to surge 186% to $0.40 a share, while its FY20 EPS figure is set to jump 46%. And if we jump out to fiscal 2021, Etsy’s adjusted earnings are expected to climb another 44% higher to $1.61 per share.
Etsy’s overall positive earnings revision strength helps it earn a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grade for Momentum in our Style Scores system. In the end, some investors might want to wait for a pullback, but Etsy could still be a solid coronavirus play, as well as a longer-term bet on the e-commerce boom.
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