Etsy (NASDAQ:ETSY) was declining for the eighth straight session on Tuesday. It lost as much as 2.19% to trade at $51.85 during afternoon trading.
The stock has been on a downward trajectory since August 21, when it closed 3.14% lower at 62.92. Between August 21 and August 29, the stock lost nearly 16%, compared to a 1.41% rise in the broader markets.
Looking at Seeking Alpha’s quant rating, ETSY has been rated Hold with a score of 2.75 out of 5. The company has been graded A for profitability, but is dragged down by a D grade for growth.
Both Seeking Alpha and Wall Street analysts echoed similar sentiments and issued a Hold call for the stock.
Seeking Alpha analyst APAC Investment News expressed concerns over the stock’s tepid revenue growth and declining active buyers, which they said justified a Hold rating.
“Revenue growth is rather tepid at 2.4%. Active buyers are down 4.6% to 87.3 million,” the analyst noted.
However, they expressed optimism over Etsy’s second-hand clothing platform Depop, calling it a “bright spot” for the company, with strong growth and high Gen Z engagement. Depop could help offset softness in the Etsy marketplace, APAC Investment News said.
Speaking about the company’s valuation, the analyst said the company was fairly valued and was a major reason behind their Hold rating.
“The valuation is a big part of why I currently rate ETSY as a hold rather than a buy. I believe there’s a solid growth story here, and Etsy will enjoy strong tailwinds. However, I’m not convinced that Etsy has bottomed out yet, and I think there’s a high chance that things will get worse before they get better,” they said.