Analyzing Etsy (NYSE:ETSY) & Amazon.com (NASDAQ:AMZN)

Amazon.com (NASDAQ:AMZN) and Etsy (NYSE:ETSY) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Amazon.com and Etsy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amazon.com	0	2	56	1	2.98
Etsy	1	18	13	2	2.47

Amazon.com presently has a consensus target price of $323.09, indicating a potential upside of 21.27%. Etsy has a consensus target price of $84.68, indicating a potential upside of 1.06%. Given Amazon.com’s stronger consensus rating and higher possible upside, analysts clearly believe Amazon.com is more favorable than Etsy.

Valuation and Earnings

This table compares Amazon.com and Etsy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amazon.com	$716.92 billion	4.01	$77.67 billion	$12.43	21.43
Etsy	$2.88 billion	2.76	$162.98 million	$1.79	46.81

Amazon.com has higher revenue and earnings than Etsy. Amazon.com is trading at a lower price-to-earnings ratio than Etsy, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Amazon.com has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Etsy has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.

Insider & Institutional Ownership

72.2% of Amazon.com shares are owned by institutional investors. Comparatively, 99.5% of Etsy shares are owned by institutional investors. 8.9% of Amazon.com shares are owned by company insiders. Comparatively, 2.5% of Etsy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Amazon.com and Etsy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amazon.com	17.44%	18.00%	8.97%
Etsy	7.32%	-34.18%	15.29%

Summary

Amazon.com beats Etsy on 10 of the 15 factors compared between the two stocks.

About Amazon.com

Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content. In addition, the company offers programs that enable sellers to sell their products in its stores; and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. Further, it provides compute, storage, database, analytics, machine learning, and other services, as well as advertising services through programs, such as sponsored ads, display, and video advertising. Additionally, the company offers Amazon Prime, a membership program. The company's products offered through its stores include merchandise and content purchased for resale and products offered by third-party sellers. It serves consumers, sellers, developers, enterprises, content creators, advertisers, and employees. Amazon.com, Inc. was incorporated in 1994 and is headquartered in Seattle, Washington.

About Etsy

Etsy, Inc. operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels. Further, the company provides various seller tools, including Shop Manager dashboard, a centralized hub for Etsy sellers to track orders, manage inventory, view metrics and statistics, and have conversations with their customers; and Sell on Etsy, an application to enable enhanced onboarding and video uploading. Additionally, it offers Etsy seller analytics pages that provides insights regarding traffic acquisition for their shops; Targeted Offers, a sales and promotions tool, and social media tool; and accounting and bookkeeping services. The company also provides educational resources comprising blog posts, video tutorials, Etsy Seller Handbook, Etsy.com online forums, and insights; Etsy Teams, a platform to build personal relationships with other Etsy sellers; and a Star Seller program. As of December 31, 2021, it connected a total of 7.5 million active sellers to 96.3 million active buyers; and had 120 million items for sale. 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.