What happened
On Tuesday, numerous investors brought hobbyist website Etsy (ETSY 0.34%) into their portfolios. That followed the stock's inclusion on a small list of internet stocks favorited by an analyst. As a result, Etsy's share price ended the day more than 9% higher, a figure that convincingly trounced the 0.7% rise of the S&P 500 index.
So what
That prognosticator was Evercore ISI's Mark Mahaney, who remains rather bullish on internet titles, despite the category surging 44% higher in price year to date as a group.
"Given the rally in the net stocks, we're tempted to downgrade our investment opinion," he wrote in a note published Tuesday morning. "But we won't for two reasons -- multiples are still depressed -- i.e., below average -- and fundamentals are still soft -- i.e., revenue growth rates are weak."
In addition to Etsy, Mahaney also favors Amazon, Netflix, Meta Platforms, and Uber Technologies.
Now what
It wasn't immediately clear why Mahaney has included Etsy among these well-known titles. What's certain is that analyst opinions differ about the company's viability as an investment. Earlier this month, for example, BTIG's Marvin Fong lowered his price target on the stock considerably, dropping it to $108 per share from his previous target of $130.
Although Fong still rates Etsy a buy, he subsequently sounded a note of caution about its soon-to-be-reported second-quarter results. His analysis of the company's June traffic indicated that gross merchandise sales -- an important financial metric for the company -- will come in under the collective prognosticator estimate, and lowered his estimates for the quarter accordingly.
