Etsy Could Generate Double-Digit Revenue Growth: Analyst

Etsy Inc’s (NASDAQ: ETSY) marketplace model has exhibited great resilience versus its peers, even with the ongoing macro headwinds, according to Goldman Sachs.

The Etsy Analyst: Alexandra Steiger initiated coverage of Etsy with a Buy rating and a price target of $130.

The Etsy Thesis: The company is likely to generate double-digit revenue growth every year from 2022 to 2027, Steiger said in the initiation note.

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“We forecast a 15% ‘22-’27 revenue CAGR, mostly driven by GMS (Gross Merchandise Sales) growth of 13%, as we believe Etsy will continue to execute against a vast & growing global eCommerce opportunity,” the analyst wrote.

“We expect Etsy to reach an Adj. EBITDA margin of ~37% by 2027, supported by scale effects, as high incremental margins more than compensate for reinvestment needs to support forward growth,” he added.

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Although promising, the recent acquisitions of Depop and Elo7 are “unlikely to be accretive to consolidated economics/margins in the foreseeable future,” Steiger stated. He added, however, that Etsy’s healthy cash generation enables it to explore “a range of capital allocation options over time.”

Benzinga data finds that 12 analysts have a Buy rating on Etsy, while five have a Hold rating on the stock.

ETSY Price Action: Shares of Etsy had declined by 1.30% to $109.00 at the time of publication Monday.