Return on Equity (ROE)
since 2015
Calculation
Etsy Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss)1 | ÷ | Stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2021 | 78.51% | = | 100 | × | 493,507) | ÷ | 628,619) |
| Dec 31, 2020 | 47.04% | = | 100 | × | 349,246) | ÷ | 742,424) |
| Dec 31, 2019 | 23.58% | = | 100 | × | 95,894) | ÷ | 406,634) |
| Dec 31, 2018 | 19.33% | = | 100 | × | 77,491) | ÷ | 400,898) |
| Dec 31, 2017 | 20.61% | = | 100 | × | 81,800) | ÷ | 396,894) |
| Dec 31, 2016 | -8.67% | = | 100 | × | (29,901) | ÷ | 344,757) |
| Dec 31, 2015 | -16.36% | = | 100 | × | (54,063) | ÷ | 330,498) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 US$ in thousands
The financial performance from 2015 to 2021 is characterized by a significant transition from net losses to substantial profitability, resulting in a sharp upward trajectory for the return on equity (ROE).
- Profitability Transition
- A pivot to positive earnings occurred in 2017. Net income shifted from a loss of 54.06 million USD in 2015 to a profit of 81.80 million USD in 2017. This reversal established the foundation for subsequent growth, with net income reaching 493.51 million USD by the end of 2021.
- Return on Equity Expansion
- ROE mirrored the profitability trend, moving from negative values in 2015 (-16.36%) and 2016 (-8.67%) to a positive 20.61% in 2017. Between 2017 and 2019, ROE remained relatively stable, fluctuating between 19.33% and 23.58%. However, a period of rapid acceleration followed, with ROE climbing to 47.04% in 2020 and peaking at 78.51% in 2021.
- Equity and Efficiency Dynamics
- Stockholders' equity grew steadily from 330.50 million USD in 2015 to a peak of 742.42 million USD in 2020. In 2021, a contraction in stockholders' equity to 628.62 million USD coincided with a significant increase in net income. This combination of a rising numerator (net income) and a decreasing denominator (equity) contributed to the exponential increase in ROE during the final year of the period analyzed.
Overall, the data indicates a substantial improvement in capital efficiency, as the company evolved from an equity-eroding loss position to generating high returns on invested shareholder capital.
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Comparison to Competitors
Etsy Inc., ROE, long-term trends, comparison to competitors
| Etsy Inc. | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | TJX Cos. Inc. | |
|---|---|---|---|---|---|
| Dec 31, 2021 | 78.51% | 24.13% | 390.00% | 406.05% | 1.55% |
| Dec 31, 2020 | 47.04% | 22.84% | — | 217.09% | 55.01% |
| Dec 31, 2019 | 23.58% | 18.67% | — | 63.50% | 60.61% |
| Dec 31, 2018 | 19.33% | 23.13% | 593.54% | 58.69% | 50.66% |
| Dec 31, 2017 | 20.61% | 10.95% | 183.64% | 48.07% | 50.95% |
| Dec 31, 2016 | -8.67% | 12.29% | 110.97% | 33.26% | 52.88% |
| Dec 31, 2015 | -16.36% | 4.45% | 68.06% | 27.07% | 51.95% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Sector (Consumer Discretionary Distribution & Retail)
Etsy Inc., ROE, long-term trends, comparison to sector (consumer discretionary distribution & retail)
| Etsy Inc. | Consumer Discretionary Distribution & Retail | |
|---|---|---|
| Dec 31, 2021 | 78.51% | 35.05% |
| Dec 31, 2020 | 47.04% | 40.86% |
| Dec 31, 2019 | 23.58% | 40.77% |
| Dec 31, 2018 | 19.33% | 44.19% |
| Dec 31, 2017 | 20.61% | 38.11% |
| Dec 31, 2016 | -8.67% | 37.81% |
| Dec 31, 2015 | -16.36% | 32.09% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Industry (Consumer Discretionary)
Etsy Inc., ROE, long-term trends, comparison to industry (consumer discretionary)
| Etsy Inc. | Consumer Discretionary | |
|---|---|---|
| Dec 31, 2021 | 78.51% | 33.71% |
| Dec 31, 2020 | 47.04% | 24.49% |
| Dec 31, 2019 | 23.58% | 34.62% |
| Dec 31, 2018 | 19.33% | 34.33% |
| Dec 31, 2017 | 20.61% | 22.85% |
| Dec 31, 2016 | -8.67% | 28.74% |
| Dec 31, 2015 | -16.36% | 29.03% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).