10 Worst-Performing Growth Stocks in 2024

5. Etsy, Inc. (NASDAQ:ETSY)

Year to Date Gain as of October 28 : -40.01%

 Number of Hedge Fund Holders: 36

Etsy, Inc. (NASDAQ:ETSY) is an online company that runs an ecommerce platform. This platform connects sellers with buyers. Because of its unique digital engineering capabilities, it enjoyed tremendous growth during the post-pandemic wave of digital transformation. Fast forward, it is one of the stocks that has been battered by consumer purchasing power, taking a hit amid high inflation and the high interest rate environment. Consequently, the stock has shed more than 40.01% in market value, emerging as one of the worst-performing growth stocks in 2024.

An unfavorable macroeconomic climate, characterized by a slowdown in consumer discretionary spending and growing industry competition from both large-scale marketplaces and niche platforms, is to blame for Etsy, Inc. (NASDAQ:ETSY)’s poor performance.

Additionally, the stock has been under pressure after mixed second-quarter results that raised concerns about the company’s underlying fundamentals. While revenue increased 3%, surpassing estimates at $647.8 million, earning missed estimates on coming in at $0.41 a share. Additionally, the online retailer reported a 2.1% decline in consolidated gross merchandise sales and a 3.2% drop in Etsy, Inc. (NASDAQ:ETSY) marketplace GMS.

The company’s decision to revise its third-quarter gross merchandise sales, driven by stiff competition and mixed consumer trends, highlights the growth challenges facing the online retailer. Additionally, the company anticipates a decline in GMS for the fourth quarter.

The company is already looking ahead and planning to refine its business model. It has started optimizing its apps, websites, marketing, and operations to boost gross merchandise sales. Etsy, Inc. (NASDAQ:ETSY) is also utilizing artificial intelligence tools to help shoppers find the right products on its e-commerce platform, thereby enhancing the shopping experience.

In the second quarter, 36 hedge funds included Etsy, Inc. (NASDAQ:ETSY) in their 13F filings, collectively holding stakes valued at $1.2 billion. Elliott Management was the largest shareholder, holding 4.50 million shares.