ETSY is a decaying shell of its' former self.
Bogged down by overpriced acquisitions, sold off for losses, the same acquisitions that drove the largest segment for growth the last few quarters (Depop), left with once again, the core marketplace.
In the same time that ETSY executives were overpaying for acquisitions, they were also paying themselves hundreds of millions in compensation (Josh Silverman paid over $120 million in a single year), for keeping the lights on for the company. Innovation has fallen greatly the past couple years, SEO ranking and more has become cloudy, and the marketplace itself has lost it's major appeal after forcing sellers to pay for placement, increased fees, and high take-rates.
With a negative growth rate, increase share buybacks (while executive compensation remains), and throwing FCF basically internally, there is not much left of a story here.
We have a board rewarding executives with the same shares the company buys back, and in the long term, the net effect will be wasted profits to artificially prop up a stock to unreasonable levels purchased by the company at levels that should never had been bought. ETSY is no where near the size to be spending insane amounts $700m+ on buy-backs in a time where AI and marketplace development is KEY.
I would imagine the next 4 quarters have the stock price/enterprise value fall to the $30-35/share range, at which point ETSY itself will become an acquisition target. Their growth does not justify their current P/E levels, and their mission to integrate AI remains a flat topic.
Price Target: $30-35/share
I/We have a short position combined with 6 month PUTS at this time.