Etsy (ETSY -0.60%) investors had a rough 2022. The stock underperformed a weak market on fears about whether the e-commerce platform's growth could continue. Adjusted earnings fell 65% to 58 cents a share, as expected. Etsy stock jumped 10% on the news. For its fourth quarter, analysts expect revenue to be up 12% year over year. Despite these concerns, investors should take a closer look at Etsy. According to my valuation, the intrinsic value for the stock is $186.51, but it is currently trading at US$85.02. That makes it a bargain right now.
Etsy's success depends on its ability to attract new buyers and sellers to its platform. To do this, the company has been investing heavily in marketing, product development, and other initiatives. This has resulted in increasing costs and lower profits for the company. Despite these concerns, Etsy's revenue has been steadily increasing.
In the third quarter of 2022, Etsy reported a net income of $7.9 million, up from $3.3 million in the same period a year earlier. This was primarily due to a price hike, which helped to offset rising costs. Although volume was about steady with last year in the third quarter, revenue increased due to a price hike. Etsy is still balancing growth in its user base with cost management in order to maintain profitability.