Market Overview

Analyst: Etsy Could Make Sense For eBay, But Sale Over Near Term Is Unlikely

Share:
Analyst: Etsy Could Make Sense For eBay, But Sale Over Near Term Is Unlikely

Activist investors TPG and Dragoneer submitted a 13D filing indicating they collectively own 8 percent of Etsy, Inc. (NASDAQ: ETSY). Earlier this month, Black-And-White Capital LP claimed 2 percent of shares outstanding.

There are indications that the investors will push the company to explore a sale, and the filings helped push Etsy shares 21 percent higher to $13.73 on Tuesday.

The company is undergoing an internal strategic and operational review under new management, making an immediate sale unlikely, according to one analyst.

Loop Capital Markets analyst Blake Harper expects a catalyst when Etsy reports its Q2 earnings in three months. The company reported Q1 results that underperformed on every metric, in part due to a significantly slower February.

The analyst lowered his rating of Etsy from Buy to Hold, while maintaining a $13 price target. Estimated revenue for FY2017 was lowered to $428.5 million (17 percent growth) and adjusted EBITDA was trimmed by almost 20 percent.

Big Name Buyers For Homemade Products

The analyst sees eBay Inc. (NASDAQ: EBAY) as a logical fit to buy Etsy given its marketplace model and scale.

Amazon.com Inc. (NASDAQ: AMZN) would be another good fit. Its Handmade at Amazon site currently has only 800,000 product listings compared to Etsy’s 45 million.

However, Harper thinks a sale is unlikely in the near-term, if at all, as online online marketplace giants will be reluctant to pay a premium for a company that has decelerating growth and needs restructuring.

Related Links:

Etsy Investments Could Hinder 2017 Performance

Meet The Woman Who Turned Mean And Creepy Sexting Messages Into An Etsy Store

Latest Ratings for ETSY

DateFirmActionFromTo
Sep 2019UpgradesNeutralOutperform
Aug 2019MaintainsHold
Jul 2019UpgradesNeutralBuy

View More Analyst Ratings for ETSY
View the Latest Analyst Ratings

Posted-In: Dragoneer TPGAnalyst Color Downgrades Analyst Ratings Best of Benzinga

 

Related Articles (AMZN + EBAY)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
WABKeyBancUpgrades90.0
SMKeyBancUpgrades14.0
GBXKeyBancUpgrades38.0
JAGKeyBancUpgrades10.0
CDEVKeyBancUpgrades6.5
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Agecroft Partners Pledges $1 million From Hedge Fund Leadership Summits To Charities That Benefit Children.

Benzinga's Top Upgrades, Downgrades For May 17, 2017