An Examination Of Etsy, Inc. (NASDAQ:ETSY)
I’ve been keeping an eye on Etsy, Inc. (NASDAQ:ETSY) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe ETSY has a lot to offer. Basically, it is a financially-robust company with a strong history and a buoyant growth outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Etsy here.
Exceptional growth potential with outstanding track record
ETSY is an attractive stock for growth-seeking investors, with an expected earnings growth of 32% in the upcoming year. Earnings growth is paired with an eye-catching top-line trajectory of 66%, which indicates a high-quality bottom-line expansion, as opposed to those driven simple by unsustainable cost-cutting activities. Over the past few years, ETSY has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 21%, which is an optimistic signal for the future.
ETSY’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that ETSY has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. ETSY’s has produced operating cash levels of 0.47x total debt over the past year, which implies that ETSY’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Next Steps:
For Etsy, I’ve compiled three relevant factors you should further examine:
Valuation: What is ETSY worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ETSY is currently mispriced by the market.
Dividend Income vs Capital Gains: Does ETSY return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ETSY as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ETSY? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
