• In recent quarters, Hussman Strategic Advisors doubled its stake in Etsy, making the stock its second-largest holding, as Etsy’s core marketplace and Depop resale app both delivered gross merchandise sales growth and management continued executing a US$1.20 billion share repurchase program.
• An interesting angle is how Etsy’s mobile-first pivot, with higher app rankings and stronger engagement, is turning Depop into a major growth engine within the broader marketplace ecosystem.
• Given Etsy’s recent 7-day share price decline, we’ll examine how Depop’s expanding role could influence the company’s overall investment narrative.

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What Is Etsy's Investment Narrative?

To own Etsy today, you have to believe its niche, seller-driven marketplace and newer platforms like Depop can justify a premium valuation even as growth has been uneven and margins pressured by one-off items. The latest move from Hussman Strategic Advisors, doubling its stake and making Etsy a top holding, reinforces the idea that some institutional investors see value in the company’s mobile-first pivot and Depop’s contribution to roughly 15% of gross merchandise sales. Combined with a US$1.20 billion buyback capacity and a share price that has fallen over the past week, this could strengthen near-term support for the stock, but it does not remove key risks: slower forecast revenue growth than the broader market, high leverage, negative equity and a price-to-earnings multiple that still sits above peers.

However, investors should be aware of Etsy’s high debt levels and negative equity position. Despite retreating, Etsy's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Six Simply Wall St Community fair values, from about US$64 to just over US$108, show how widely opinions differ, particularly when weighed against Etsy’s slower forecast revenue growth and balance sheet risk profile.

Explore 6 other fair value estimates on Etsy - why the stock might be worth over 2x more than the current price!

Build Your Own Etsy Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Etsy research is our analysis highlighting 3 key rewards and 5 important warning signs that could impact your investment decision.
• Our free Etsy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Etsy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.