1 Formerly High-Flying E-Commerce Stock That's a Terrific Value, or a Terrible Value Trap
Shareholders of Etsy (NASDAQ: ETSY), the e-commerce marketplace for craft and vintage goods, are having to play a painful waiting game. The company was booming during 2020 and 2021, and management made some missteps it has been unwinding (it overpaid for marketplaces Depop and Elo7, the latter of which it just sold for a loss). In the interim, growth has sputtered.
Investors can take solace in the fact that it's not just Etsy feeling the pinch of tightening consumer spend. Retailers around the U.S. have slowed, some of them even reporting shrinking sales (looking at you, Target (NYSE: TGT)). However, Etsy stock looks cheap by some metrics -- but is this just a value trap?
Not two months after I ranked Etsy stock as a hold headed into second-quarter 2023 earnings, the market decided it was time to punish Etsy again. Shares are back down to the multiyear lows last seen during summer 2022, when the bear market was in full swing. This certainly smells like a value trap -- a company whose valuation looks cheap, but whose stock keeps falling in price anyway.
Source Fool.com
