Etsy, Inc. Fundamental Analysis (NYSE: ETSY)
Etsy, Inc. (NYSE: ETSY) shows weak financial fundamentals with a PE ratio of 40.11, profit margin of 7.33%, and ROE of -17.67%. The company generates $2.9B 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 49.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ETSY's fundamental strength across five key dimensions:
Efficiency Score
WeakETSY struggles to generate sufficient returns from assets.
Valuation Score
ModerateETSY shows balanced valuation metrics.
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 40.11 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ETSY's PEG of 0.91 indicates potential undervaluation.
Price to Book
The market values Etsy, Inc. at -5.75 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.55 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 $7.33 as profit after all expenses.
Operating Margin
Core operations generate 15.99 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-17.67 in profit for every $100 of shareholder equity.
ROA
Etsy, Inc. generates $8.59 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Etsy, Inc. produces operating cash flow of $661.14M, showing steady but balanced cash generation.
Free Cash Flow
Etsy, Inc. generates strong free cash flow of $620.19M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.54 in free cash annually.
FCF Yield
ETSY converts 7.64% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
40.11
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.91
vs 25 benchmark
P/B Ratio
Price to book value ratio
-5.75
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.82
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-2.20
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.48
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.18
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.39
vs 25 benchmark
How ETSY Stacks Against Its Sector Peers
| Metric | ETSY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 40.11 | 25.50 | Worse (Expensive) |
| ROE | -17.67% | 964.00% | Weak |
| Net Margin | 7.33% | -4901.00% (disorted) | Weak |
| Debt/Equity | -2.20 | 0.60 | Strong (Low Leverage) |
| Current Ratio | 1.48 | 2.34 | Neutral |
| ROA | 8.59% | 322.00% | Weak |
ETSY outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
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