SHOP - Forget Etsy: Buy These 3 E-Commerce Stocks Instead
2024-02-28 07:00:00 ET
Etsy was once considered a promising play on the secular expansion of the e-commerce market. It had carved out a high-growth niche with its focus on custom and handmade products, and it attracted a lot of sellers who didn't want to join a massive marketplace like Amazon or eBay .
But over the past 12 months, Etsy's stock has declined about 40% as its growth has slowed to a crawl. Its revenue only rose 7% in 2023 -- compared to a 10% increase in 2022 -- and analysts expect just a 4% uptick in 2024. Etsy CEO Josh Silverman blamed that deceleration on a "tepid macro climate for consumer discretionary products" during its latest conference call, but the company could also be saturating its niche market.
So instead of betting on Etsy's ability to reignite its growth again, I believe investors should buy these three more promising e-commerce stocks instead: e-commerce services giant Shopify (NYSE: SHOP) , high-growth Chinese e-tailer PDD Holdings (NASDAQ: PDD) , and Latin American market leader MercadoLibre (NASDAQ: MELI) .
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Forget Etsy: Buy These 3 E-Commerce Stocks Instead