Etsy (ETSY 43.183, +10.193, +30.90%), a global marketplace for unique and
creative goods, is trading at new all-time highs after the company raised
guidance for the year, announced new subscription packages and new enhanced
tools to support global sellers at different stages of growth. Etsy also
announced that it is revising its seller transaction fee, which will support
increased investments in the growth and health of the marketplace.
Starting in mid-July, sellers looking to jump-start their growth can opt into Etsy Plus for an introductory rate of $10/month. In 2019, Etsy also plans to roll out Etsy Premium, which will be geared towards larger, more established creative businesses. Sellers who do not opt into Etsy Plus or Etsy Premium will have access to the same tools and services that are currently available on Etsy without an additional monthly fee as part of Etsy Standard.
Starting July 16, 2018, the transaction fee charged when a seller makes a sale will change from 3.5% to 5%, and it will also apply to the cost of shipping. This revised fee structure will enable Etsy to make further investments in marketing to attract buyers, enhance customer support, and drive product innovation.
Given the higher fees, Etsy raised FY18 guidance. The company now sees GMS (sales on the platform) growth of 16-19% (up from 16-18%) and revenue growth of 32-34% (up from 22-24%). Etsy reaffirmed EBITDA up 21-23%, reflecting Etsy's planned reinvestment in improved seller tools and support, enhanced shipping experience, and increased marketing.
Etsy has reported revenue growth acceleration and beaten estimates on the top and bottom line four quarters in a row.
At $44/share, ETSY has a ~$5.5 bln valuation, with an enterprise value roughly 9x sales estimates or ~40x EBITDA estimates.
- OUR VIEW
- LEARNING CENTER