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Face Mask Sales Push Etsy Stock To Record Highs

A spike in face masks sales caused Etsy Inc (NASDAQ: ETSY) stock to rise 5.1% to $101.22 on Tuesday, a record hig

Benzinga · -

A spike in face masks sales caused Etsy Inc (NASDAQ:ETSY) stock to rise 5.1% to $101.22 on Tuesday, a record high. 

What Happened

In the first three weeks of March, Etsy’s value eroded by half as investors were anxious about sales losses caused by the pandemic, but the rising sales of face masks on the platform emerged as a mitigating factor, noted CNBC.

RBC Capital Markets has raised the price target for Etsy to $117 from $79, while Goldman Sachs Group Inc (NYSE:GS) raised the price target from $88 to $120. 

A Jefferies Analyst noted that a surge in face mask sales since April had introduced new shoppers to the marketplace’s “broader offerings.”

Etsy sold more than 12 million face masks worth $133 million in April. 

Why It Matters

The turnaround is significant as the company withdrew its 2020 guidance in April due to prevailing economic uncertainties.

In Etsy's first-quarter results, CEO Josh Silverman attributed heightened mask sales to the United States Centers for Disease Control and Prevention guidelines on face coverings. 

Revealing how Etsy capitalized on the demand, Silverman said, “ Our team mobilized quickly to address the surge in face mask demand, which included creation of on-site banners and automated filters, scaling inventory with a call to action for sellers, retraining our search algorithms, and managing delivery expectations.”

It is uncertain if Etsy can carry forward the sales momentum when economies reopen, but RBC has raised the e-commerce firm’s 2021 revenue estimate by 9.5% and said it expects sales next year to the tune of $1.4 billion, a 22% jump over the 2020 figure, reported CNBC.

Price Action

On Tuesday, Etsy shares closed 5.11% higher at $101.22.