The question of where the Etsy-Share (WKN: A14P98) stands today, we can answer comparatively simply: The current share price amounts to a price level of 94.05 euros, or 112.38 US dollars. For many, this is relevant information. Especially since the price has more than tripled since the bottom in the Corona crash.
The question of the market value may also have a certain relevance: It is currently around $ 13.4 billion. And, a little hint: this is definitely a value that we will need again later.
But where will Etsy’s stock possibly be in five years? An exciting question that we want to get to the bottom of below. To do this, however, we need more information about where the stock will now be. As well as the extent to which growth could accelerate now. Because, small spoiler: It could well be a growth leap ahead.
Current status & growth forecast!
We actually know exactly where the Etsy stock is now. Looking at the latest quarterly figures, we can see that the e-commerce player had sales of almost exactly $ 228 million for the first quarter of this year. This corresponded to a growth rate of 34.7% year-on-year, which has meant roughly average growth for the past few months.
In the following, let’s just assume that Etsy may now be facing a growth leap. Why? Well, we’ll take a closer look at that in a moment. However, in the following we expect that the comparatively small online trading center will now achieve average sales growth of around 45% over the next five years. In principle, this could be stronger growth.
Based on first quarter sales, that would mean Etsy would have $ 1.45 billion in quarterly sales within five years. Or annualized to around $ 5.8 billion. That in turn would mean that Etsy would be valued at just over 2 in the current market capitalization. It definitely looks interesting.
Why such a jump in growth?
The exciting question is likely to be: Why should Etsy be able to celebrate such a leap in growth? After all, the first quarter showed that sales growth of 34.7% has recently been achieved, which was more in line with Etsy’s historical average. The simple answer? Management has already announced that there will be such a hop in the short term.
In the second quarter, sales will climb by around 70 to 90% year-on-year. That’s right, these are significantly higher growth rates. However, possibly only once. My assumption behind the 45% is therefore: Etsy can take up the momentum and direct it to other areas. The leap in sales in the last quarter is likely to be linked in particular to a higher sales volume in corona times. Masks for the face have been particularly sought-after assets. However, if the new customer base is also interested in other things on Etsy, growth could accelerate.
Our premises are even comparatively conservative: The $ 228 million in the first quarter is a rather low starting point, the Christmas quarter is actually the strongest historically. That said, my forecast could include an even smaller security buffer.
An interesting perspective!
Ultimately, time will tell whether Etsy can significantly increase its growth. For the second quarter, however, the following applies: expectations are high. As I said, management spoke of a significantly greater momentum. Let’s stay curious about how it goes on. In any case, the next five years could be interesting.
The post growth leap ahead! Where will the Etsy share be in 5 years? appeared first on The Motley Fool Germany.
Vincent owns shares in Etsy. The Motley Fool owns shares of and recommends Etsy.
Motley Fool Deutschland 2020