ETSY Inc reports a stunning amount of sales growth of 36% y/y with a gross profit ratio of 66%. ETSY reports EBITDA growth of 51% and an EBITDA ratio of 18%. In my view, I do appreciate it. ETSY does not report large EBITDA growth. But, the company’s EBITDA ratio is positive and equal to 18%. The numbers seem beneficial. Furthermore, operating income is another positive feature of ETSY. The company’s operating income grows at 19% y/y. Besides, traders will most likely appreciate that ETSY’s EPS grew 25%. In my view, the company’s performance is favorable
Etsy, Inc. Is Expensive
Etsy, Inc. operates online market places for buyers and sellers primarily in the United States, the United Kingdom, Canada, Australia, France, and Germany. Its online market places include Etsy.com and Reverb.com.
With an asset/liability ratio of more than 1x, ETSY’s balance sheet looks stable. ETSY reports $1144 million in cash and cash equivalents. In my view, the company has a good amount of cash to conduct additional R&D and increase its marketing efforts.
ETSY’s short-term debt is less significant than the cash in hand. In my experience, ETSY Inc may not have to worry about any liquidity risk.
In Q3, ETSY reported quarterly sales of $451 million and gross profit of $331 million. Besides, the company’s R&D expenses were equal to $45.908 million, with selling and marketing expenses of $16.7233 million.
Additionally, ETSY is profitable, which is helpful. ETSY Inc released a positive quarterly EBITDA of $135 million. I think that considering the quality of the business, I see room for ETSY to grow into its valuation over time. ETSY also showed a positive net income of $91.761 million. I think that the company’s performance is positive.
With all that said, ETSY trades at 109x EBITDA. Even with the company’s EBITDA margin of 18%, the EV/EBIDA ratio does not make sense. The company is quite expensive.
Disclosure: We don’t own ETSY, We May Short sell The Company
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