‘The Next Amazon’: 5 Undervalued Ecommerce Stocks with Huge Upside

In this article, we discuss the 5 undervalued ecommerce stocks with huge upside. If you want to read our detailed analysis of these stocks, go directly to ‘The Next Amazon’: 10 Undervalued Ecommerce Stocks with Huge Upside.

5. Etsy, Inc. (NASDAQ: ETSY)

Number of Hedge Fund Holders: 53   

Etsy, Inc. (NASDAQ: ETSY) is ranked fifth on our list of 10 undervalued ecommerce stocks with huge upside. The firm is headquartered in New York and operates online marketplaces that connect sellers with buyers. These include Etsy and Reverb. The firm markets 85 million items through different retailers on the platforms. According to Jonathan Weber, a market expert and author at Cash Flow Kingdom, the company has grown to a sizable business in the niche market it operates, returning more than 1,200% to investors over the past five years and outperforming the broader market. Weber further noted how the company was not overvalued at 54x expected net profits, compared to other ecommerce players in the market.

On July 7, investment advisory Needham initiated coverage of Etsy, Inc. (NASDAQ: ETSY) stock with a Buy rating and a price target of $250, underlining that the firm was one of the best growth ideas in the coverage with long-term sales growth expected. 

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Etsy, Inc. (NASDAQ: ETSY) with 2.3 million shares worth more than $465 million. 

In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Etsy, Inc. (NASDAQ: ETSY) was one of them. Here is what the fund said:

“Etsy continued to be a top contributor in the Portfolio during the first quarter. Etsy experienced record levels of demand in 2020. Throughout the beginning of this year, the business has continued to see accelerated growth trends. The company’s recently announced fourth quarter results provided numerous data points that highlight Etsy’s success in both broadening and deepening the relationship it has with buyers and sellers on its platform. In fact, Etsy now stands as the fourth largest e commerce site in the U.S. Repeat buyers have grown nearly 100% year-over-year, despite mask sales, which grew rapidly at the onset of the pandemic, shrinking to less than 5% of sales.

We continue to believe Etsy remains in the early stages of growing out its platform.

We remain confident in its ability to compound its value for shareholders at an attractive rate going forward.”