Etsy (NASDAQ: ETSY), an online marketplace for unique items, reported earnings for its second quarter of 2022 just a few days ago. The market seemed to be overjoyed with the results as the shares jumped nearly 10% the day after the report.

Short-term price movements -- down or up -- often fail to tell the full story, and while Etsy's results were quite encouraging, taking the sharp rise in share price at face value may blindside business-focused investors. Let's dig deeper to see why. 

Etsy's online marketplace has become a popular shopping destination for over 90 million buyers. The appeal of the exclusive and hand-crafted goods keeps those buyers coming back to Etsy's platform, and as buyers grow, they attract more sellers, creating a network effect and a key source of competitive advantage for Etsy. 

Continue reading

Source Fool.com