Analyst Questions Etsy's Post-IPO Valuation, 'Well-Beyond' Comparisons

Etsy Inc ETSY started trading publicly 24 hours ago, and the price quickly doubled from its $16 IPO. The company, which remains unprofitable, traded as high as 84x estimated 2015 EBITDA – a level that Wedbush said is "well beyond the high end of any comparable group." The analysts placed an "upper bound" valuation equal to Twitter Inc's TWTR 53x, with a more reasonable value equal to Alibaba Group Holding Ltd's BABA 23x.

The analysts do not view Etsy as an acquisition target since its customers and sellers are not exclusive to the platform. Instead, they cross pollinate with eBay Inc EBAY, Alibaba, and Amazon.com, Inc. AMZN. If any of these players

Wedbush placed a Neutral rating on Etsy with a price target of $14, more than 50 percent below current price. The analysts said that they would revisit the rating, perhaps to issue a Sell, if "shares continue to trade at these out-of-range multiples."

Recently, Etsy traded at $29, down 3.3 percent on the trading session. Based on that price, Etsy's valuation is around $3.25 billion. The stock traded as high as $35.74 in the minutes after shares started trading Thursday.