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Etsy stock could be a great long-term option

  • The online trading company’s stock market share is at a discount.
  • It is likely that in the short term the company’s shares will remain highly volatile.
  • But in the long term it would be the shares of one of the most important companies in its sector.

Knowing which assets will perform best going forward is not an easy task for investors and analysts. Matters are more complicated when it comes to growth stocks, as macroeconomic conditions promise volatility in the near term. Nevertheless, There are investment options that stand out above the rest and among them are the shares of Etsy.

There are many reasons why this online trading company can be considered one of the nicest bets. This paper will show some of the justifications that investors could have in front of placing their capital in the firm. Before that, it is important to keep in mind that this work is not investment advice and is intended for informational purposes only.

It should also be considered that you should not invest in a single asset, but the best idea is diversification. In that sense, there are numerous professional analysts and advisers who can help to have a clearer picture. Having said this, it should be noted that this company is subject to market conditions. That way, the context of 2023 does not seem very clear to say with certainty that this investment will pay off in the short term.

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Etsy’s actions in the pandemic context

Etsy stocks are among those who have benefited from the pandemic boom. During the lockdowns, e-commerce experienced an unprecedented rise thanks to people being cooped up at home. In the case of Etsy, its behavior had overtones of exaggeration, with growth comfortably double the average for that market.

The characteristics of this platform is that it sells products that are beyond the conventional. This means that people are looking for merchandise that makes them feel more original. Consequently, during the pandemic, the sale of face masks with different characters was a big boost for the company. Similarly, all the product categories offered by the platform were very well received.

Then, with the end of the confinements, many companies in the sector suffered considerable falls. In the case of Etsy, although it was impossible to keep up with the pace they had during the lockdowns, their growth was remarkable. In other words, excluding the covid-19 era, its growth in sales volume was huge. Thus, in the second quarter of 2022, it was 141% above pre-pandemic levels.

In parallel with the growth in sales of the Etsy platform, its shares are in great health in perspective. Currently, like all growth stocks, it has been suffering from unfriendly macroeconomic conditions. Despite this, the company’s long-term prospect is one of the brightest compared to other similar firms.

Etsy stock is down 55%
Etsy shares are trading -55% from their late-2021 peak. However, they are more than 70% up from their biggest recent drop. This implies that in the short term it could be an investment with little interest. But, in a longer time, it becomes one of the perfect options. Image: finance.yahoo.com

Long-term projections

As already stated, market conditions make predicting stock market behavior almost impossible. If inflation in the US economy remains longer than expected or if a recession becomes a reality, stocks are likely to fall further in the near term. That means the investment in Etsy is strictly one for longer temporary slots when the company develops its full potential.

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How to be sure that stocks are a reliable investment in the long term? The answer to this question must be answered with some singular facts. One of them has to do with competition from the most powerful firms. Few online commerce companies have competed head to head with Amazon and lived to tell about it. In the case of Etsy, its platform not only rubbed shoulders with the industry giant when Amazon launched its handmade goods platform, but also beat it.

And this could only be the beginning of an epic long-term growth story.. Based on the strength, recognition and maturity of its brand and its platform, the growth opportunity in the future market could be hundreds of billions of dollars, according to the portal. Motley Fool and that “has barely begun to scratch the surface.”

The other aspect that encourages investors to buy Etsy shares is that they fell significantly. During the recent depreciation of growth stocks, the value of this company’s shares was placed at a discount seat that looks extremely attractive.. For investors focused on the long term, it would be worth placing some capital and hoping that all the optimistic forecasts about the company come true in a few years.

Etsy's potential is one of the biggest in the online sales industry
During the time of the pandemic lockdowns, Etsy’s trade volume was double the average for companies in the online sales industry. Not counting the numbers from that boom, the platform is seeing 141% growth compared to its pre-pandemic growth. Image: Edesk.com

Discount and future projections: the dream mix

If something attracts investors, it is the discount shares of companies with great projections in the long term. Etsy stands out as one of the biggest in that regard. There is still no certainty if in 2023 they will rise or fall further in their price. But what can be taken for granted is that in the long term they will rise and will be sources of significant returns.

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In that case, investors might assume that putting money into Etsy now may be a once-in-a-lifetime opportunity. Hence, its shares are placed on the buy now list, that is, before the end of January. Once again, it is an investment not destined to return in the short term. For less patient investors, there is another group of stocks that might be of interest.

As of this Tuesday’s close (January 17), according to Yahoo Finance, Etsy’s shares are trading at $132.51 per share. This is a considerable discount, considering the peak of $307.7 per unit of participation reached on November 26, 2021. This is a drop of -55% that many analysts advise to take advantage

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