Wolfe Research started coverage of Etsy ( NASDAQ: ETSY ) stock at Peer Perform on Thursday, advising that recession risks counteract strong growth characteristics.
Equity analyst Deepak Mathivanan told clients that the company offers a “differentiated
consumer value proposition” and an “attractive profitability profile” that it should be able to maintain. However, he indicated that worries about consumer pressure into 2023 prevent him from recommending the stock even after its steep drop from its late-2021 peak.
“Macro sensitivity is likely to be very high given the relatively discretionary nature of ETSY’s core categories,” Mathivanan wrote on Thursday, explaining the balanced risk/reward. “Meanwhile, the benefits of recent take rate increases should help revenue growth outpace GMV growth over the next three quarters and help profitability incrementally.”
He sees the fair value as somewhere between $80 and $150. Shares rose modestly on Thursday, touching an intraday high near $119.
Read more on Needham’s more bullish take on the stock into 2023 .
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Etsy started at Hold by Wolfe Research as macro weakness balances growth