Is Etsy, Inc. overvalued or undervalued?

As of 2 November 2022, the valuation grade for Etsy, Inc. moved from expensive to risky, indicating a shift in perception regarding its market value. Based on the analysis, Etsy appears to be overvalued at its current price of $53.92. The P/E ratio stands at 21, while the EV to EBITDA ratio is 15.34, which is relatively high compared to peers like Chewy, Inc., which has a P/E of 44.61 and an EV to EBITDA of 68.67, suggesting that Etsy's valuation does not align favorably with its earnings potential.
Additionally, Etsy's Price to Book Value is notably negative at -7.31, which raises concerns about its asset valuation. In comparison, Global-e Online Ltd. also carries a risky valuation with a P/E of -86.05, highlighting the volatility and uncertainty in this sector. Despite a recent one-month stock return of 13.28%, which outperformed the S&P 500's 3.83%, the longer-term performance shows a decline of 46.73% over five years, reinforcing the conclusion that Etsy is currently overvalued in the market.