Expect EBITDA Margin Compression At Etsy As Investments Elevate Buyer Stickiness, Analyst Warns
Portfolio Pulse from Nabaparna Bhattacharya
Needham analyst Anna Andreeva reiterated a Buy rating on Etsy, Inc. (NASDAQ:ETSY) but lowered the price target to $130 from $160. The analyst warns of EBITDA margin compression as Etsy invests in buyer stickiness and expects a decline in Habitual buyers. However, Repeat buyer numbers remain steady at 40% of the base.

June 02, 2023 | 6:30 pm
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Needham analyst Anna Andreeva lowered Etsy's price target to $130 from $160, warning of EBITDA margin compression as the company invests in buyer stickiness. Habitual buyers are expected to decline, but Repeat buyer numbers remain steady at 40% of the base.
The lowered price target and warning of EBITDA margin compression may have a negative impact on Etsy's stock price. However, the analyst maintains a Buy rating and the fact that Repeat buyer numbers remain steady at 40% of the base suggests that the company's efforts to retain customers are working. This mixed outlook leads to a neutral short-term impact on the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100