10 Best High Short Interest Stocks to Buy Now

4. Etsy Inc. (NASDAQ:ETSY)

Short % of Float As of April 16: 19.45%

Number of Hedge Fund Holders: 58

Etsy Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers worldwide. It operates through three segments: Etsy, Reverb, and Depop. It primarily operates the Etsy marketplace that connects artisans and entrepreneurs with various consumers. It also offers Reverb, which is a musical instrument marketplace, and Depop, which is a fashion resale marketplace.

The Etsy marketplace is central to the company’s growth, but it faced challenges in 2024, with GMS (Gross Merchandise Sales) declining by 8.6% year-over-year in Q4. For the full year, Etsy marketplace GMS was down 4% from 2023 and reached $12.6 billion for the consolidated entity. This underperformance is attributed partly to prioritizing longer-term customer experience improvements over near-term conversion-driving experiments.

Despite the GMS decline, the Etsy marketplace led a consolidated record revenue of $2.8 billion, which was up ~2% year-over-year. This was achieved through initiatives like Etsy Ads and consolidated payments. In Q4 alone, consolidated revenue increased by 1.2% year-over-year to a record $852 million. The company’s strategy for 2025 centers on focusing on Etsy Inc.’s (NASDAQ:ETSY) differentiation by emphasizing its unique selection of over 100 million creative goods.

Oakmark Global Fund stated the following regarding Etsy, Inc. (NASDAQ:ETSY) in its Q2 2024 investor letter:

“Etsy, Inc. (NASDAQ:ETSY) is a global marketplace for unique and creative goods that connects millions of buyers and sellers across the world. We first became interested in Etsy in 2017 when Josh Silverman took over as CEO and began transforming the company from a borderline nonprofit into a higher margin, faster-growing enterprise. The Covid-19 pandemic accelerated the company’s already strong fundamental results as millions of new customers flocked to the platform, but like many other Covid-19 beneficiaries, Etsy has since fallen deeply out of favor. In our view, investors today are too focused on the timing of Etsy’s return to growth and are ignoring the company’s positive long-term outlook. We believe the macro environment for Etsy’s product categories will eventually improve and Etsy is poised to benefit. At the same time, we believe Etsy’s continued push into international markets can provide a solid source of revenue growth for the long-term. After the recent sell-off, we were able to purchase shares at a discount to our estimate of intrinsic value.”