5 Reasons To Buy Etsy According To Needham

Etsy Inc ETSY should be able to retain the record-high new users added to its platform in 2020, while the recent acquisitions of Depop and Elo7 will expand the company’s total addressable market to include “new attractive categories, demographics and geographies,” according to Needham.

The Etsy Analyst: Anna Andreeva initiated coverage of Etsy with a Buy rating and a price target of $250.

The Etsy Thesis: The company is “one of the best growth ideas in our coverage,” Andreeva said in the initiation note.

The analyst mentioned 5 reasons for recommending Etsy:

• Has a more operationally focused strategy now and its operations are streamlined, while “initiatives to invigorate GMS growth and profitability are just getting underway.”
• Has made investments in search and discovery, which should “help it retain the record-high number of buyers brought in by the pandemic.”
• Acquisitions of Depop and Elo7 will expand the company’s total addressable market into “the fastest category in apparel, a complementary demographic, and jump-start the company's entry into South America's largest country.”
• International should continue to outperform, given the company’s investments in marketing.
• Shares have pulled back almost 20% from their March highs.

ETSY Price Action: Shares of Etsy had risen by 1.55% to $195.89 at the time of publication Thursday.

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