While the pandemic has been wreaking havoc in the global economy, stocks like Etsy have recorded massive gains. According to the research data analyzed and published by Stock Apps, the Etsy marketplace recorded an increase of 147% YoY on gross merchandise sales (GMS) during the second quarter of 2020.
During the period, sales amounted to $2.7 billion, resulting in $429 million in revenue and more than $150 million in EBITDA. Considering that the revenue a year ago was $181 million, it marked an increase of 137%.
It is noteworthy that of the total sales, $346 million came from masks, with more than 110,000 sellers selling at least one mask in Q2 2020. However, the performance is not solely tied to mask sales, seeing as non-mask sales increased 93% during Q2.
Despite the fact that the number of sellers increased during the period, the average GMS for every active seller grew 15% YoY. Additionally, Etsy reported an influx of new buyers as well as reactivated ones totaling 18.7 million during the period. The total number of new buyers was 12 million, compared to 19 million for the whole of 2019.
In its largest category, housewares and home furnishings, the Etsy platform had over $2 billion in sales over the past year. For the second quarter alone, the sector sold more than $700 million worth of merchandise and reported a growth rate of 128% YoY. Crafts supplies were also up 138%.
From a price of around $45 at the beginning of January, Etsy stock is currently worth around $122 per share. This is extremely impressive given that the S&P 500, which is considered a performance yardstick, only rose by around 3%.
P/E Multiple Soars from 30x in 2017 to 155x in 2020
Since 2017, Etsy Inc. stock has soared from $20.45 to an all-time high of $135.52, which was recorded on August 5, 2020. This translates to a dramatic increase of over 560%. In part, this incredible rise is attributed to a growth surpassing 85% in terms of revenue for the period between 2017 and 2019.
Revenue shot up from $441 million back in 2017 to over $818 million in 2019. Earnings per share similarly increased from $0.69% to $0.80 between 2017 and 2019, a growth of 16%. Looking at the P/E multiple also reveals a remarkable increase from 30x in 2017 to 55x in 2019. In 2020, this figure stands at 153x.
When Etsy launched its IPO in 2015, its price was $16 and it closed the first day of trade at $30, an increase of 88%. After this, it plunged by over 60% to a record low of $6.36 in February 2016. Following this rough start, the stock took more than 3 years to surpass the levels reached during the debut.
In 2019, Etsy seemed to be playing the contrarian when after recording an entire year of spectacular growth, its stock closed 2019 down by almost 5%. Similarly, when the coronavirus pandemic was dramatically disrupting the world of business, it started beating the market.
Pinterest Stock Increased 275% While Blue Apron Served 20,000 More Customers
Aside from the opportunities created by the general COVID-related eCommerce uptrend, a number of additional factors have contributed to Etsy’s recent impressive performance. One has to do with the soaring unemployment rates that have seen some turn hobbies into jobs. This would explain why new sellers increased by 100% during the quarter.
Another contributing factor to Etsy’s impressive growth is the fact that DIY trends seem to be gaining in popularity. A case in point is Pinterest, one of the most popular platforms for creatives.
At the end of 2019, Pinterest had 322 million active users globally, recording a 29.1% increase to 416 million during Q2 2020. The YoY increase for global active monthly users was even bigger at 39%. Stock prices were not left behind, recording gains of over 275%, hitting a 52-week high of $38.23 in August 2020 following a low of $10.10 in March 2020.
Blue Apron Holdings, an eCommerce platform selling kitchen products, recipes and cooking ingredients, is yet another remarkable DIY performer for the quarter. Attesting to its increasing popularity, it has seen a net revenue increase of 29% from Q1 to Q2 2020. Similarly, it has recorded a 10% increase YoY in net revenue for Q2. During the quarter, it served 20,000 more customers, with an average increase of 25% YoY in revenue per customer.
Customers placed 17% more orders and it had an increase of 148% on adjusted EBITDA YoY. In March 2020, its stock hit a 52-week low of $2.01. In a mere five days, the situation turned dramatically with an increase of 865% to a high of $19.49.