ETSY - Embedded Expectations Analysis - 2020 01 21
ï€ Etsy, Inc. (ETSY:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 23.8x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about the launch of free shipping, their Etsy Ads initiative, and marketingï€ Specifically, management may be concerned about the launch of their free shipping initiative, its impact on financial performance, and its ability to improve customer experience and sentiment around shipping. Moreover, they may be exaggerating the progress of their Etsy Ads initiative, and they may lack confidence in their ability to help sellers grow budgets with positive returns and add new sellers to Etsy Ads. Furthermore, they may be concerned about their decision to transition from product listing ads to TV ads, and they may lack confidence in the launch of a tool to help international sellers implement preferred pricing strategies. Finally, they may alsolack confidence in their ability to increase GMS per active buyer and prevent take rate dilution
Etsy provides sellers a marketplace with buyers along with a range of seller tools and services that are specifically designed to help its creative entrepreneurs generate more sales and scale their businesses. The company's platform includes the Etsy and Reverb Holdings, Inc. (Reverb) online marketplaces, its seller tools and services, its engaged sellers and buyers, and its technology. The company's primary marketplace, Etsy.com, is where buyers come to discover a selection of goods that are hard to find elsewhere. Reverb, the company's subsidiary, operates as a standalone marketplace. This two-sided marketplace connects buyers and sellers of new, used, and vintage musical gear from all over the world.
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