Etsy (NASDAQ:ETSY) found its shares on the rise after Piper Sandler upgraded them to overweight from neutral. The firm said that it thinks Etsy’s marketplace strengths will “help reaccelerate active buyer growth.”
Analyst Edward Yruma expects Etsy should see a reacceleration of active buyer growth over the medium term, which is expected to support continued market share gains. Amid the choppy macroeconomic backdrop macro, Etsy’s EBITDA margin and long-term growth opportunities make it a standout in the online retail sector. Yruma also said Etsy’s core marketplace strengths of sustainability, intention, and personalization line up with the core values of Gen Z and millennials.
ETSY is an operator of two-sided marketplaces that connects buyers and sellers. Its main marketplace is Etsy.com, where buyers sell crafts, handmade goods, vintage items, and other unique items. About 26% of the goods sold on its marketplace in 2022 were custom or made-to-order merchandise.
In addition to its namesake marketplace, the company also runs Reverb, a musical instrument marketplace; fashion resale marketplace Depop; and Elo7, a Brazilian -based marketplace for handmade and unique goods.
Etsy is its largest contributor, with GMS (gross merchandise sales) of $12 billion in 2022. Reverb had GMS of $943 million, Depop’s GMS was $552 million, and Elo7 produced GMS of $70 million.
ETSY began trading Tuesday stronger $4.89, or 4.5%, to $113.14.