Whether Etsy (ETSY -1.75%) can rebound remains to be seen, but it still has potential to be a stock market beater over the long-term. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on May 11, Motley Fool contributors Toby Bordelon and Brian Withers discuss whether the popular e-commerce platform can climb back to its 2021 highs.
Toby Berdelon: Should I just accept, if I'm an Etsy shareholder, that two-plus year return or so is the reality of what I'm dealing with? Should I never expect to get back to those highs of late 2021? Was that just like an overvalued fever dream that will never happen again?
Brian Withers: I love your description of overvalued fever dream. Yes, that probably was but I think the company has potential. But, let's keep things in perspective. This quarter, to me, was a stark reminder that this company relies on sales of discretionary items to consumers. As many tech and e-commerce stocks took off during the coronavirus, they certainly got to what I would call over-hyped status. When you look at where the company has come since you mentioned that February 2020 time period, it is absolutely amazing. Check out this chart. The number of sellers has more than doubled. The number of buyers is up more than 80%. GMS, gross merchandise sales on their platform is up 130%. This is a massive base of sales and transactions, which I think has been pulled forward. But what I like is management recognizes this slowing growth is an issue and has been incredibly transparent and has a data-driven strategy to get growth going again. I like the business, its leaders. It supports small business owners to help them make money and the massive opportunity ahead that I talked about earlier. Investors should be patient. It will take a while for this company to rebound, especially if we get into a recession, but I think this is a stock market beater over the long-term.
