Etsy Inc (NASDAQ:ETSY) continues impressing investors amid its growth potential and impressing financial performances in the past quarters. Following a bumpy early ride of FY2017, ETSY stock bounced back sharply during the rest of the year, hitting the highest level of $22 a share at the end of last year. However, investor’s profit-taking brought back its shares to $19.5 a share at present.

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The dip in its share presents a solid entry point, analysts say. Recently, KeyBanc Capital Markets increased ETSY stock rating to overweight, amid its confidence in the company’s new CEO. KeyBanc expressed confidence in the company’s numerous self-help initiatives and an improvement in operational efficiencies.

The company’s average revenue growth of 42% in the last three years highlights its aggressive growth ambitions. It has been smartly allocating its resources in high growth areas that have the potential to generate a sustainable growth in the long-term.

The CEO said, “We will continue to make progress on our strategy to own ‘special’ shopping occasions by delivering a more engaging experience for our buyers, and providing our sellers with the tools they need to compete.”

In the latest quarter, the company generated a total revenue of $106.4 million and a growth of 21.5% year-over-year, supported by growth in Seller and Markets Services revenue. Its markets segment revenue jumped 11.2%, while its seller services revenue soared 30.6% year-over-year.

Higher revenues and strong operational efficiencies led the company to post earnings of $25 million, relative to the loss of $2.5 million in the past year quarter. Moreover, the company continues investing in growth opportunities to extend the momentum. Etsy recently selected Google Cloud as its public cloud provider. This move set the company to focus on improving its engineering efficiency and strategic initiatives. This transition is likely to take two years.

The company’s cash generation potential is strong enough to support its expansion activities. In the latest quarter, Etsy generated operating cash flow of $17 million, compared to the capital requirements of $2 million. Thus, the company was left with $15 million to invest in growth opportunities. In the final quarter of 2017, ETSY announced a share buyback program of $100 million, indicating the management’s confidence in the future fundamentals and cash generation potential. Therefore, there is a lot of evidence to believe in the upside potential of ETSY stock.   

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