Motley Fool Money Etsy's "Jedi Mind Trick"
Feb 23, 2023
Tim Beyers, an investment analyst at The Motley Fool, discusses Etsy's strategic short- and long-term growth amidst challenges like seller dissatisfaction and declining merchandise sales. He highlights the hype surrounding Nvidia and questions the sustainability of its AI-driven growth. Joining him is Maya Lau, host of "Other People's Pockets," who shares insights from her conversations on salary and economic class, exploring the tension between pursuing passion and achieving financial stability. Both guests provide a nuanced view of the current economic landscape.
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Etsy's Jedi Mind Trick
- Etsy emphasizes three-year comparisons in their earnings, suggesting a return to a "normal" pre-pandemic baseline.
- Investors should evaluate if this comparison is valid and analyze what constitutes "normal" for Etsy.
Etsy's Growth Levers
- Watch how Etsy management plans to attract more sellers and buyers to the platform.
- Sustainable growth for Etsy depends on expanding its marketplace, not just increasing fees.
Three-Year Comparisons
- Many growth companies, like Etsy, use three-year comparisons.
- Investors should consider a company's valuation and traditional year-over-year comparisons when evaluating such claims.