Etsy
ETSY
is making strong efforts to enhance its key marketplace offerings in a bid to bolster its footprint in the e-commerce space.
This is evident from its latest agreement to acquire Depop, a provider of a resale fashion marketplace, for $1.6 billion.
Notably, Depop’sregistered userbase currently stands at 30 million. Further, the company has4 million active buyers and 2 million active sellers.
The underlined buyout is expected to be completed in third-quarter 2021. The acquisition is expected to be accretive.
The addition of Depop will expand Etsy’s house of brands portfolio. Etsy will offer and operate three e-commerce brands —Etsy, Reverb and Depop.
Growth Prospects, Marketplace in Focus
The latest move is likely to aid Etsy in gaining a strong footprint in the e-commerce market, which,per a report from Grand View Research, is expected to witness a CAGR of 14.7% between 2020 and 2027.
Further, with Depop, the company remains well-poised to capitalize on the growth prospects present in the second-hand market, which is likely to seea CAGR of 39% between2019 and 2024.
Moreover, the latest move is expected to highly benefit the company’s marketplace business, which allows merchants to list and sell their unique and creative products belonging to various categories.
Further, the buyout decision bodes well for Etsy’s deepening focus toward solid organic traffic base expansion.
Wrapping Up
The company continues to benefit from accelerating Marketplace revenues. Solid momentum across active sellers and buyers remains a major positive. Additionally, the company’s expanding collection of unique items is another positive.
Moreover, its strong efforts toward enhancing product offerings in order to deliver enhanced customer experience and solid execution of key growth initiatives— search and discovery, customer liability, marketing, and seller tools and services—remain noteworthy.
All the factors will likely continue to shape up the company’s growth trajectory in the near term as well as in the long haul.
Zacks Rank & Key Picks
Etsy currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are
Alphabet Inc.
GOOGL
,
Marchex, Inc.
MCHX
and
Workday, Inc.
WDAY
. While Alphabet sports a Zacks Rank # (Strong Buy), Marchex and Workday carry a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Alphabet, Workday and Marchex are currently pegged at 18.13%, 20.21% and 15%, respectively.
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