“I kinda love Etsy,” Mush said in a tweet, love prompted after he “bought a hand knit wool Marvin the Martian helm for my dog.”
While Musk’s word holds weight with some investors, the stock also earned some more bullish sentiment this week from Wall Street.
Jefferies analyst John Colantuoni rated the stock a Buy on Tuesday, and boosted his price target on the stock from $205 to $245 – 21% higher than the price as of this writing.
Colantuoni said in a note that he expects Etsy will be able to translate the market-share gains it has seen amid the coronavirus pandemic into longer-term growth.
“We believe behavioral changes incited by the pandemic allow ETSY to tap a broader portion of its $1.7 trillion addressable market, leading to higher frequency and spending,” Colantuoni said, adding that the company has roughly 8% penetration across households globally, suggesting more room for growth.
Colantuoni estimates that for every 1% increase in penetration, Etsy will add roughly 4 million shoppers giving it a “long runway to add buyers.” And given that shoppers who flocked to Etsy to buy masks and holiday items in 2020 returned to buy other items on the platform, the Jefferies analyst believes gross merchandise volume (GMS) per buyer could increase by roughly 5% on average from 2021 to 2025.
“We estimate GMS per buyer will become an increasingly important contributor to long-term GMS growth, driven by average annual purchase frequency improving from ~2.5x in 2019 to ~3 in 2025,” Colantuoni said.
Etsy has been among the standout performers of the past several months. Shares are up more than 575% since the March 23, 2020 market bottom.
“Accelerating traffic and our deep dive into long-term GMS improves our confidence in ETSY’s ability to continue growing faster than overall e-commerce,” Colantuoni concluded.