Is ETSY a high-quality business?

AlphaMadera's AlphaQuality grade scores Etsy, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how ETSY compares to a Buffett-style quality bar.

What is Etsy, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to ETSY based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes ETSY a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

ETSY - Etsy, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $70.24 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

C+ 57.8 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

D 37.0

5yr Avg ROIC 0.0% 10/100
Operating Margin Trend +2.47 pp/yr 100/100

Capital Efficiency

Weight: 15%

D+ 40.8

5yr Avg ROE 0.0% 10/100
5yr Share-Count CAGR -4.2% 98/100

Growth Quality

Weight: 15%

C- 48.1

5yr Revenue CAGR 5.5% 62/100
5yr EPS CAGR -20.0% 0/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

A- 85.2

5yr FCF Margin 24.7% 95/100
5yr FCF/NI Conversion 2.42x 74/100

Balance Sheet

Weight: 20%

B+ 79.9

Net Debt / EBITDA -2.39x 100/100
Interest Coverage (EBIT/Int) 14.33x 91/100
Altman Z-Score 1.60 30/100

Stability

Weight: 15%

C 55.0

EPS Volatility (σ/μ) 0.60 22/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 0/5 100/100

6 of 6 gurus held; 1 new buy; 2 added; 3 trimmed; 1 full exit.

Holders: 6 +1
Avg Δ position: -4.3%
New buys: 1
Full exits: 1

Soros new
Mandel sold -100%
Laffont increased +198%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.