Etsy $ETSY finished the week up 9% to $79.81, but is still down 74% from its high of $307.75 back in November 2021.
Whilst there has been a growing number of analysts interested in Esty over the last few weeks, with the most recent price targets Wall Street Analysts Raymond James and Evercore ISI, of $100 and $95 respectively, overall investors appear pessimistic towards the e-commerce space and Retail in general given the looming recession.
However, if we are to have a recession then the idea of holding companies with positive cash flow becomes a premium and Esty has positioned itself perfectly in that regard.
With nearly $550 million in trailing free cash flow, and a market cap of $10.1 billion, Esty currently trades at a price-to-free-cash-flow ratio of 18.5. For a company that has grown its earnings per share (EPS) at an average annual rate of 71.40% and is forecast to grow EPS over the next 5 years at a rate of 39.95%, this looks like an attractive entry price.
Probably the least appealing aspect of Esty is the insider ownership, which currently sits at 0.6%, and having a look at the past 6 months, there hasn't been a single insider purchase of the stock.
Overall, I think Esty's position in the market and the moat that it has built over the years is impressive. There is really nothing like it, as @lukeadams covered last week, there's really nothing like it on the market and despite many attempts by competitors, they are still the go-to provider of unique and creative goods. Their acquisitions also build out its defensive position ever further.