Can ETSY's Explosive Growth Continue?

We featured ETSY as one of our Holiday Shopping winners, and boy were we right. When we sent the report, ETSY demand was booming into a critical shopping period, and shares were trading below $155.Shares gained as much as +58% in value through early March, following a big Q4 beat where the company added 61 million new and reactivated buyers to its platform. Now Etsy's YoY growth rate is being tested, especially when compared with Covid-induced demand.

Make no mistake -- Purchase Intent mentions in 21Q1 (ended March 31) were impressive: +49% YoY. But this is much smaller than the +91% YoY observed in the prior quarter. To give scale for the staying power of this platform, Purchase Intent mentions are +71% higher than they were in 2019 on a 30day Moving Average, and Consumer Happiness remains consistently high at 80% positive. Ebay, for comparison, boasts Consumer Happiness levels more than 15 points lower (63% positive). Personalization and unique item discovery are driving ETSY Consumer Happiness and Demand. LikeFolio data shows that demand for personalized items remains elevated: +8% YoY, and was a key driver in the last holiday shopping season. We're expecting a great report, but the bar is very high.  ETSY reports May 5 after market close.