Market Overview

4 Catalysts That Should Lead To Stronger Growth For Etsy

4 Catalysts That Should Lead To Stronger Growth For Etsy

Shares of Etsy Inc (NASDAQ: ETSY) are down 18 percent since the company reported its Q4 results.

Investor interest is likely to grow in the stock, given Etsy’s “strong competitive position” and upside to growth estimates from the investments made by the company, Loop Capital’s Blake Harper said in a report.

While reiterating a Buy rating and $16 price target, Harper noted the existence of “multiple catalysts that are not fully included in the guidance that should lead to stronger growth in 2017.”

4 Catalysts

Harper enumerated four important catalysts that could lead to stronger-than-expected growth in 2017:

  • Impact from brand marketing through digital channels: Etsy has raised its digital brand marketing campaign to $20 million in 2017, from $6 million in 2016. This should help the company position itself as “a special occasion shopping site into a more comprehensive shopping experience,” Harper mentioned.
  • Search and discovery improvements: “The company's investments in AI [artificial intelligence] and ML [machine learning] should lead to higher conversion and order frequency as the former Blackbird team improves search and discovery. The company is also improving recommendations of complementary products,” the analyst wrote.
  • Launch of Etsy Studio: Scheduled for April, the Etsy Studio would launch with about 8 million product listings. Harper expects this to “capture more of a large market ripe for online penetration.”
  • Launch of Shop Manager dashboard: This will likely increase the attach rate of multiple seller services.

Related Link: Etsy Investments Could Hinder 2017 Performance

Latest Ratings for ETSY

Dec 2019Initiates Coverage OnBuy
Dec 2019DowngradesEqual-WeightUnderweight
Oct 2019MaintainsEqual-Weight

View More Analyst Ratings for ETSY
View the Latest Analyst Ratings

Posted-In: Blake Harper Loop Capital MarketsAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga


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