During the depths of the pandemic, Etsy (ETSY -5.46%) was booming, as spending activity on its online marketplace soared. Growth was through the roof, which sent shares higher. However, the company has struggled in recent years.
These days, investors have every reason to be dissatisfied with this business. If you'd invested $10,000 in this e-commerce stock five years ago, here's how much you'd have today.
Etsy shares have lagged the overall market
Etsy was once a darling on Wall Street. But this positive momentum seems like ancient history. That's because the stock has nosedived 47% in the past five years (as of Oct. 7), a disappointing showing that would've turned a $10,000 investment into $5,300 today.
The S&P 500, on the other hand, doubled during that period.
Gone are the days of huge growth
Etsy benefited tremendously from the COVID-19 health crisis, but it was a temporary phenomenon. Once consumers returned to their normal shopping patterns, it created a headwind for the business.
The company has been having a hard time growing. It handled $12.3 billion in gross merchandise sales on the platform in the last 12 months. This was 9% below the total from 2021, indicating falling buyer interest for the unique products Etsy offers.
Shares now trade at a cheap valuation, which might be enticing for contrarian investors.
