Why ETSY Shares Are Up 13%

Etsy Inc. (NASDAQ:ETSY), founded in 2005, is an online marketplace where customers can buy handmade products and vintage items. The Brooklyn, New York-based e-commerce website sells a variety of products ranging from jewelry and face masks to home decor and toys. The company, which went public in 2015, also generates revenue by offering services to merchants in starting and managing their business. Moreover, it also helps shoppers to buy from millions of unique listings on its website.

The company just had an amazing year. Its stock value climbed more than 320 percent over the past year as people increasingly turned to online marketplaces like Etsy for buying goods during the pandemic. The Covid-19 outbreak led to strong demand for handmade face masks on Etsy. As millions of customers visited the platform for buying masks, it eventually attracted more sellers to register on Etsy for reaching a massive audience. As of third quarter, the company had more than 3.6 million active sellers, translating to a significant surge of more than 42 percent on a year-over-year basis.

Meanwhile, Etsy enjoyed strong profit and revenue growth in recent quarters. In its previous quarterly report, the company’s revenue surged more than two folds to $451.5 million, while its earnings came in at 70 cents per share, well above 12 cents per share in the comparable period of 2019. One reason behind the strong performance was the customers who visited Etsy for the first time to buy masks and ended up shopping more products. Another milestone Etsy achieved last year was its addition to the S&P 500 in September.

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Some analysts believe that Etsy will continue to perform well in the coming quarters, as many smaller retailers have permanently shifted their business to its online platforms. Moreover, Etsy was a lifesaver for numerous small business owners who had to shut their physical outlets due to the pandemic.

Etsy shares hit a new 52-week high of $211.85 in the mid-day trading Tuesday. At 1:08 p.m. ET, the stock jumped 13.24 percent to $207.27 on a heavy volume of about 6.9 million shares.