Etsy Inc (NASDAQ: ETSY) said on Wednesday it will buy Depop for $1.62 billion. Depop is a fashion resale app that is focused primarily on Gen Z. Shares of the company closed about 6% up on Wednesday.
Gina Sanchez’ remarks on CNBC’s “Trading Nation”
The news comes after a significant hit to Etsy in the past three months as COVID-19 restrictions started to ease, decelerating online shopping and pushing the stock down by 26%. On CNBC’s “Trading Nation”, Gina Sanchez (chief market strategist at Lido Advisors and CEO of Chantico Global) said:
“In the near term, they’re suffering from pandemic success. They grew so strong and so fast through the pandemic that it’s going to be very difficult for them to keep that going, and that’s basically what CFO Rachel Glaser came out and said, and it really disappointed the entire market.”
Sanchez further highlighted that the Depop acquisition will help drive long-term growth for Etsy as it targets lower demographic (26-year-olds on average), but was unlikely to pay off in the next couple of quarters.
The expert further highlighted that despite the pullback in recent months, Etsy still exchanges hands at close to double the valuation of the XRT retail ETF. She said:
“There’s a cheaper way to play this recovery, and that’s just going to be a challenge for Etsy. I like the long-term story, but the short-term valuation doesn’t work right now.”
Mark Newton seconds Sanchez’ on CNBC’s “Trading Nation”
President of Newton Advisors, Mark Newton, echoed Sanchez’ remarks in the same interview with CNBC, declaring $181 as a strong resistance that Etsy will find challenging to break above. He said:
“I would avoid this. I do think it has further to go on the downside between now and late July.”
In the retail space, Newton saw MarineMax as a much better buying opportunity after the recreational boating retailer slipped about 30% in the past few weeks. Currently, at $47.30 per share, the expert sees the stock jumping to mid-to-high $50s in the upcoming weeks.
Etsy closed the regular session at $175 per share on Wednesday. It opened lower at $171 on Thursday morning and is currently exchanging hands at $166.67. At the time of writing, the American eCommerce company is valued at $21.49 billion and has a price to earnings ratio of 49.35.
The post Is Etsy stock a buy after $1.6B Depop acquisition? appeared first on Invezz.
from USA – Invezz https://ift.tt/2RZ2qnN
Wajeeh Khan
Click here to Join RICH DAD SUMMIT online with ROBERT KIYOSAKI - $1 Training for Passive Income: https://bit.ly/RichDadSummitWealthTraining
0 Comments