How to buy Etsy stock
Etsy (NASDAQ: ETSY) is an online marketplace connecting buyers and sellers of unique products that went public in 2015. Etsy believes that the connection between buyers and sellers is key to its success and differentiates it from competitors with a mission to “keep commerce human.” With over 2.8 million small businesses selling through their platform, the company has experienced impressive success, differentiating itself from commerce giants like eBay and Amazon. Major competitors include Amazon, eBay, Shopify, Alibaba, Poshmark, and Rakuten.
How do I buy Etsy stock?
You’ll need to get set up with a broker to buy Etsy stock. Today, there’s no reason why you should spend a cent on commissions with so many discount brokers offering you commission-free trades. Most online brokers don’t charge any trading commissions on stocks and have no account minimum to get started.
How do I buy Etsy with an index funds?
If you don’t want to spend the time following your stock, you have lots of ways to make money in the stock market, including index funds. Index funds often own hundreds of stocks, offering the benefit of diversification without the extra work of analyzing and evaluating individual stocks. As a result, you benefit from a “hedging” effect where your profits are not solely reliant on ETSY alone. Therefor, you spread your risk in the trade.
iShares Core S&P 500 ETF (IVV), ProShares Ultra Technology (ROM), and Global X E-commerce ETF (EBIZ) — among others — have exposure to Etsy.
How to research and analyze Etsy stock before you buy
If you’re interested in buying individual stocks, you’ll need to research and figure out if Etsy stock is a good buy or not. You’ll want to understand the company, its products, its balance sheet and its industry. So you’ll need to read through its filings with the Securities and Exchange Commission (SEC).
Understanding Etsy can help you decide whether it’s time to buy more stock at a discount or sell.
Should you invest in Etsy?
Year-to-date, Etsy’s shares (-32%) have underperformed the S&P 500 (-8%) by a wide margin as per the chart above. Despite multiple price target reductions, Wall Street remains bullish on Etsy. It’s not difficult to see why. Etsy has a unique business model that in the last few years has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories. Etsy has an enormous addressable market, one that some analysts peg as high as $2 trillion.
Is Etsy a good stock to buy now?
As an online marketplace, Etsy experiences the most price volatility during earnings reports. If it exceeds earnings forecasts, you can expect price action on the stock to rise.
Etsy is currently trading at consensus forward next twelve months’ EV/EBITDA and normalized P/E multiples of 25.8 times and 34.7 times, respectively, as per S&P Capital IQ data. With so much growth still ahead, Etsy’s stock looks like a solid long-term buy today.
According to 12 analyst offering 12-month price targets in the last 3 months, Etsy has an average price target of $189.17 with a high of $280.00 and a low of $115.00. This current average has decreased by 4.7% from the previous average price target of $198.47
Etsy has demonstrated that it can grow naturally along with making acquisitions that can meaningfully impact the balance sheet. It appears to be an attractive investment, and a dollar-cost averaging approach could be employed in order to spread the cost basis and mitigate any dips.
