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Etsy, Inc.

NYSE · Consumer Cyclical
Etsy, Inc.
ETSY · Internet Retail
$64.42
▲ 1.25 (1.98%)
Data cached · refreshes every 10 min
Mr. Market is currently offering Etsy, Inc. at $64.42.
The business passes only 1 of 7 of Graham's defensive criteria — well below his required standard.
Overall Grade
B
Defensive
C
Enterprising
Profitability B
Gross Profit Margin 71.6%
Operating Margin 12.8%
Net Income Margin 5.7%
Fin. Health D
Years to Pay Off Debt 18.9 yrs
Working Capital vs Long-Term Debt -$1.7B
Working Capital $597M
Valuation A
Price-to-Book -5.57x
Cash Flow B
Free Cash Flow $639M
CapEx % of Net Income 33.5%
Owner Earnings $319M
1/7
Graham Score
Speculative
Defensive — Graham's strict criteria (P/B, P/E, dividends, stability)  ·  Enterprising — Profitability & cash flow focused, accepts higher valuations for quality
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies. Negative P/B indicates book equity has been reduced by buybacks — common in highly profitable capital-return businesses.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Market Data
Market Cap $6.1B
Enterprise Value $7.6B
P/E (TTM) 24.68
Dividend Yield N/A
Exchange NYSE
Key Margins
Gross Profit 71.6%
Operating Margin 12.8%
Net Margin 5.7%
Company Info
Sector Consumer Cyclical
Industry Internet Retail
Employees 2375
Country United States
Visit website
📖
Full Graham Analysis

Mr. Market is currently offering Etsy, Inc. at $64.42.

The business passes only 1 of 7 of Graham's defensive criteria — well below his required standard.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

About Etsy, Inc.

Etsy, Inc., together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, and internationally. It operates through Etsy and Depop segments. The company operates Etsy marketplace that connects artisans with various consumers; and Depop, a fashion resale marketplace. It also provides marketplace activities, including transaction offsite advertising, payments processing, and listing fees, as well as from optional seller services, which include on-site advertising and shipping labels. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

Showing Key Metrics
Income Highlights
Metric 2025 2024 2023 2022
Gross Profit % 71.6% ▼ 72.4% 69.8% 71.0%
Operating Margin % 12.8% ▼ 13.5% 12.7% 15.1%
Net Income % 5.7% ▼ 10.8% 11.2% -27.1%
Diluted EPS 1.39 ▼ 2.35 2.24 -5.48
Balance Sheet Highlights
Metric 2025 2024 2023 2022 2021
Total Assets $2.8B $2.4B $2.7B $2.6B N/A
Total Debt $3.1B ↑ $2.4B $2.4B $2.4B N/A
Working Capital $597M ▼ $663M $860M $882M N/A
Years to Pay Debt 18.87 7.85 7.77 -3.44 N/A
Cash Flow Highlights
Metric 2025 2024 2023 2022 2021
Free Cash Flow $639M ▼ $709M $666M $646M N/A
Owner Earnings $319M $455M $439M -$560M N/A
CapEx % of Net Income 33.5% 14.3% 13.0% N/A N/A
These metrics estimate what Etsy, Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.
Graham's Fair Value
N/A
Margin of Safety
—
Market Cap ÷ Company Value
-1.12
P/B Ratio
-5.57
Warren's Owner Earnings
$319M
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
1/7 — Speculative Investor
✅ Adequate Size
$2.9B
vs > $1.5B revenue
❌ Strong Financial Condition
1.44x
vs Current Ratio > 2.0x
❌ Earnings Stability
1 loss years (4 yrs data)
vs No negative EPS years
❌ Dividend Record
No dividend
vs Uninterrupted dividends
❌ Earnings Growth
-37.9% EPS growth
vs > 33% EPS growth
❌ Moderate P/E Ratio
24.7x
vs P/E ≤ 15.0x
❌ Moderate Price-to-Book
N/A (negative book value)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it may or may not apply to modern businesses.
✅ Adequate Size — $2.9B vs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 1.44x vs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
❌ Earnings Stability — 1 loss years (4 yrs data) vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividend vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
❌ Earnings Growth — -37.9% EPS growth vs > 33% EPS growth
EPS grew from $2.24 to $1.39 over 2 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
❌ Moderate P/E Ratio — 24.7x vs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
❌ Moderate Price-to-Book — N/A (negative book value) vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
This company has negative book equity — meaning accumulated buybacks and dividends exceed retained earnings on paper. This is common in highly profitable, capital-return-focused businesses (e.g. Domino's, McDonald's, Home Depot) and does not indicate financial distress. P/B is not a meaningful valuation metric for these companies.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
Net Current Asset Value
$-20.70
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
N/A
Per share, no-growth floor. Compare to current price.
Cash Flow Analysis
Metric 2025 2024 2023 2022 2021
Capital Expenditure % of Net Income 33.5% 14.3% 13.0% N/A N/A
Repurchase of Capital Stock -$777M -$724M -$577M -$426M N/A
Free Cash Flow $639M ▼ $709M ▲ $666M ▲ $646M • N/A •
Warren's Owner Earnings $319M $455M $439M -$560M N/A
Peers & Industry Comparison
Internet Retail — Auto-detected peers
Company Price Market Cap P/E Gross Margin Net Margin Revenue
ETSY $64.42 $6.1B 24.68 71.6% 5.7% $2.9B
AMZN
Amazon.com, Inc.		 $271.18 $2,916.3B 32.4 50.6% 12.2% $742.8B
BABA
Alibaba Group Holding Limited		 $133.77 $330.1B 23.6 40.8% 8.9% $1,016.7B
JD
JD.com, Inc.		 $30.05 $41.0B 15.9 9.3% 1.5% $1,309.1B
EBAY
eBay Inc.		 $109.36 $48.6B 25.3 71.8% 17.6% $11.6B
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
1.35%
Low — management has little skin in the game
Return on Assets (ROA)
5.8%
Strong — management uses assets efficiently
Share Buybacks (Latest Year)
$777M
Management is returning capital to shareholders via buybacks
Debt Trend YoY
+29.1% YoY
Debt is growing — management is leveraging up
Leadership Team
Kruti Patel Goyal
CEO, President & Director
Age 49
Pay: $2,246,015
1.378% of net income
Charles Baker
Chief Financial Officer
Age 58
Pay: $1,128,169
0.692% of net income
Robert Kalin
Co-Founder
Age 45
Jared Tarbell
Co-Founder
Debra Wasser
Vice President of Investor Relations
Age 60
Top Institutional Holders
Institution % Owned Shares
Blackrock Inc. 14.12% 13,396,425
Vanguard Group Inc 11.03% 10,468,334
Renaissance Technologies, LLC 5.66% 5,367,442
Elliott Investment Management L.P. 5.27% 5,000,000
Goldman Sachs Group Inc 4.80% 4,557,730
AQR Capital Management, LLC 4.33% 4,111,639
Barclays Plc 4.26% 4,041,220
Van Eck Associates Corporation 3.93% 3,734,156
Risk Analysis
Beta (Market Risk)
1.90
High volatility — moves more than the market
Short Interest
18.2% of float
Heavy short selling — market has significant bearish bets
Current Ratio
1.69x
Adequate liquidity
52-Week Price Range
Low: $43.69 Current: $64.42 High: $76.52
Currently at 63% of 52-week range

Etsy, Inc. (ETSY) fundamental analysis — Overall grade B based on profitability, financial health, valuation and cash flow. Graham's Fair Value: N/A. Gross profit margin: 71.6%. Operating margin: 12.8%. Net margin: 5.7%. Market cap: $6.1B. Sector: Consumer Cyclical. Industry: Internet Retail. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett principles.

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