In the pre-coronavirus era, we were cautious on Etsy, primarily because we questioned its niche in the dominant era of Amazon (AMZN). In the aftermath of stay-at-home policies, we are more constructive but still Neutral on the stock.

The company clearly benefited from the rising demand in small, creative items and, most importantly, - face masks. A large question is: why not raise the rating to a BUY? At this point, the stock move has been so strong on COVID news that we are afraid much of the traction has already been incorporated. Rather, our Neutral rating suggests that ETSY stock is in a good shape and should be monitored from quarter to quarter for a potential upgrade.

Below, we analyze the latest quarterly update from Etsy.

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