8 Best Wide Moat Stocks to Buy According to Analysts

3) Etsy, Inc. (NASDAQ:ETSY)

Number of Hedge Fund Holders: 36

Analysts’ Average Price Target: 18.72%

Etsy, Inc. (NASDAQ:ETSY) offers e-commerce services. It provides handmade and vintage items, art, and supplies, and regular items like clothing, housewares, paper goods, candles, and other items.

Etsy, Inc. (NASDAQ:ETSY) managed to build a marketplace spanning non-traditional, unique, customizable, and artisanal inventory, deriving a wide moat as a result of the network that grows more valuable as additional buyers and sellers join it. The company’s moat gets further strengthened by its strong position in the niche market, aided by a loyal customer and seller base. Etsy, Inc. (NASDAQ:ETSY)’s focus on improving customer experience, leveraging AI, and continuing to maintain a unique marketplace having high-quality listings should continue to support its growth trajectory.

Market experts opine that there remains a significant opportunity for Etsy, Inc. (NASDAQ:ETSY) to accelerate growth and improve margins. This momentum is expected to be supported by greater economic rents from its two-sided marketplace for artisanal goods because of healthy market share and lack of direct competition.

In 2Q 2024, Etsy, Inc. (NASDAQ:ETSY) saw its consolidated revenue coming at $647.8 million, up by 3.0% YoY, with a take rate of 22.0%. Its positive revenue increase was primarily due to growth in Marketplace revenue, mainly aided by payments revenue and transaction fee revenue from Offsite Ads. For 3Q 2024, the company expects an adjusted EBITDA margin of ~27%.

Piper Sandler reaffirmed a “Neutral” rating on the shares of Etsy, Inc. (NASDAQ:ETSY), giving a price objective of $56.00 on 23^rd August.

Oakmark Funds, advised by Harris Associates, released its second quarter 2024 investor letter. Here is what the fund said:

“Etsy, Inc. (NASDAQ:ETSY) is a global marketplace for unique and creative goods that connects millions of buyers and sellers across the world. We first became interested in Etsy in 2017 when Josh Silverman took over as CEO and began transforming the company from a borderline nonprofit into a higher margin, faster-growing enterprise. The Covid-19 pandemic accelerated the company’s already strong fundamental results as millions of new customers flocked to the platform, but like many other Covid-19 beneficiaries, Etsy has since fallen deeply out of favor. In our view, investors today are too focused on the timing of Etsy’s return to growth and are ignoring the company’s positive long-term outlook. We believe the macro environment for Etsy’s product categories will eventually improve and Etsy is poised to benefit. At the same time, we believe Etsy’s continued push into international markets can provide a solid source of revenue growth for the long-term. After the recent sell-off, we were able to purchase shares at a discount to our estimate of intrinsic value.”