Etsy Down 74%: Is the Stock a Buy?

Etsy's (NASDAQ: ETSY) share price has plummeted from the lofty highs it commanded a year ago. The e-commerce company reported a tepid first quarter, with revenue advancing by just 3.5% year over year. With more shoppers returning to physical stores, momentum has slowed significantly, which has contributed to the stock's 74% drop from recent highs.

Investors might have gotten a little too enthusiastic about Etsy's long-term prospects, when the stock traded at a valuation of over 100 times earnings per share during the pandemic. Etsy was never going to sustain triple-digit levels of growth in gross merchandise sales, so a correction by the market should have been expected.

On the other hand, the stock might be oversold, since it's also not reasonable to assume that 3.5% growth is the new normal for this emerging e-commerce brand. Let's look at two reasons why the stock could be a steal right now.

Source Fool.com