Etsy, Inc. Fundamental Analysis
Etsy, Inc. (ETSY) shows weak financial fundamentals with a PE ratio of 22.69, profit margin of 9.94%, and ROE of -25.47%. The company generates $2.8B in annual revenue with weak year-over-year growth of 2.68%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 30.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ETSY's fundamental strength across five key dimensions:
Efficiency Score
ExcellentETSY demonstrates superior asset utilization.
Valuation Score
ExcellentETSY trades at attractive valuation levels.
Growth Score
WeakETSY faces weak or negative growth trends.
Financial Health Score
ExcellentETSY maintains a strong and stable balance sheet.
Profitability Score
WeakETSY struggles to sustain strong margins.
Key Financial Metrics
Is ETSY Expensive or Cheap?
P/E Ratio
ETSY trades at 22.69 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ETSY's PEG of 0.30 indicates potential undervaluation.
Price to Book
The market values Etsy, Inc. at -5.68 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 13.29 times EBITDA. This signals the market has high growth expectations.
How Well Does ETSY Make Money?
Net Profit Margin
For every $100 in sales, Etsy, Inc. keeps $9.94 as profit after all expenses.
Operating Margin
Core operations generate 14.26 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-25.47 in profit for every $100 of shareholder equity.
ROA
Etsy, Inc. generates $10.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Etsy, Inc. generates strong operating cash flow of $714.89M, reflecting robust business health.
Free Cash Flow
Etsy, Inc. generates strong free cash flow of $663.29M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.99 in free cash annually.
FCF Yield
ETSY converts 10.55% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.69
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.30
vs 25 benchmark
P/B Ratio
Price to book value ratio
-5.68
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.23
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-0.65
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.69
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.25
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.29
vs 25 benchmark
How ETSY Stacks Against Its Sector Peers
| Metric | ETSY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.69 | 24.20 | Neutral |
| ROE | -25.47% | 1170.00% | Weak |
| Net Margin | 9.94% | 2530.00% | Weak |
| Debt/Equity | -0.65 | 0.72 | Strong (Low Leverage) |
| Current Ratio | 1.69 | 2.82 | Neutral |
| ROA | 10.62% | -8380.00% (disorted) | Strong |
ETSY outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Etsy, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
106.30%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-42.39%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
26.09%
Industry Style: Cyclical, Growth, Discretionary
High Growth