Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Etsy Inc., MVA calculation
US$ in thousands
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).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of Market Value Added (MVA) from 2017 to 2021 reveals a period of substantial volatility in market perception contrasted with a consistent and accelerating growth in invested capital.
- Market Valuation Trends
- The fair market value exhibited significant fluctuations, characterized by an initial increase from 3.14 billion USD in 2017 to 8.63 billion USD in 2018, followed by a slight contraction in 2019. A sharp escalation occurred in 2020, with the valuation peaking at 28.52 billion USD, before undergoing a correction to 22.46 billion USD by the end of 2021.
- Invested Capital Expansion
- Invested capital followed a steady upward trajectory throughout the five-year period. Starting at 498.79 million USD in 2017, the amount increased progressively, reaching 1.49 billion USD in 2020 and further expanding to 2.84 billion USD in 2021. This represents a significant increase in the capital base deployed to support operations.
- Market Value Added (MVA) Dynamics
- MVA closely mirrored the movements of the total market value, as the market capitalization remained substantially higher than the invested capital. MVA grew from 2.64 billion USD in 2017 to a peak of 27.03 billion USD in 2020. Despite the increase in invested capital in 2021, the MVA declined to 19.62 billion USD, reflecting a decrease in the market premium attributed to the company.
The extreme divergence between invested capital and market value observed in 2020 suggests a period of heightened investor optimism and high growth expectations. While the 2021 figures indicate a market correction, the MVA remains substantially elevated compared to 2017-2019 levels, suggesting a permanent step-up in the perceived value of the firm relative to its capital investment.
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MVA Spread Ratio
Etsy Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 19,621,918) | 27,032,030) | 6,401,032) | 8,096,762) | 2,640,601) | |
| Invested capital2 | 2,842,921) | 1,488,547) | 888,183) | 536,522) | 498,789) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 690.20% | 1,816.00% | 720.69% | 1,509.12% | 529.40% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Amazon.com Inc. | 728.57% | — | — | — | — | |
| Home Depot Inc. | 631.50% | — | — | — | — | |
| Lowe’s Cos. Inc. | 457.91% | — | — | — | — | |
| TJX Cos. Inc. | 327.36% | — | — | — | — | |
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).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 19,621,918 ÷ 2,842,921 = 690.20%
4 Click competitor name to see calculations.
The financial data from 2017 to 2021 reveals a period of significant volatility in market valuation juxtaposed with a consistent expansion of the capital base. While the market's perceived value of the entity peaked in 2020, the underlying invested capital maintained a steady upward trajectory throughout the five-year period.
- Market Value Added (MVA)
- A substantial increase in MVA is observed between 2017 and 2020, rising from 2,640,601 thousand USD to a peak of 27,032,030 thousand USD. This growth was non-linear, with a slight contraction in 2019 followed by a surge in 2020. A corrective trend occurred in 2021, where MVA declined to 19,621,918 thousand USD.
- Invested Capital
- Invested capital demonstrates a consistent and accelerating growth pattern. From 498,789 thousand USD in 2017, the capital base grew to 2,842,921 thousand USD by 2021. This represents a nearly six-fold increase in the total capital deployed, indicating an aggressive expansion of the operational foundation.
- MVA Spread Ratio
- The MVA spread ratio exhibits extreme fluctuations, reflecting the divergence between market valuation and capital investment. The ratio peaked at 1,816.00% in 2020, indicating a massive market premium over the invested capital. However, by 2021, the ratio contracted sharply to 690.20%. This decline is the result of a dual impact: the reduction in overall MVA and the simultaneous increase in invested capital, which effectively diluted the spread.
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MVA Margin
Etsy Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 19,621,918) | 27,032,030) | 6,401,032) | 8,096,762) | 2,640,601) | |
| Revenue | 2,329,114) | 1,725,625) | 818,379) | 603,693) | 441,231) | |
| Add: Increase (decrease) in deferred revenue | 1,075) | 3,647) | 139) | 1,216) | 614) | |
| Adjusted revenue | 2,330,189) | 1,729,272) | 818,518) | 604,909) | 441,845) | |
| Performance Ratio | ||||||
| MVA margin2 | 842.07% | 1,563.20% | 782.03% | 1,338.51% | 597.63% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Amazon.com Inc. | 312.93% | — | — | — | — | |
| Home Depot Inc. | 237.60% | — | — | — | — | |
| Lowe’s Cos. Inc. | 145.00% | — | — | — | — | |
| TJX Cos. Inc. | 227.93% | — | — | — | — | |
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).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × 19,621,918 ÷ 2,330,189 = 842.07%
3 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 is characterized by significant volatility in market valuation relative to a consistent expansion in adjusted revenue. While the company experienced a substantial peak in value creation during 2020, the subsequent period shows a correction in both absolute market value added and the corresponding margin.
- Market Value Added (MVA)
- A strong upward trend was observed from 2017 through 2020, with MVA rising from 2,640,601 thousand USD to a peak of 27,032,030 thousand USD. A moderate contraction occurred in 2019, followed by an exponential surge in 2020. By December 31, 2021, MVA declined to 19,621,918 thousand USD, representing a reduction from the previous year's peak despite continued growth in underlying operations.
- Adjusted Revenue
- Adjusted revenue demonstrated uninterrupted year-over-year growth throughout the analyzed period. The figures climbed steadily from 441,845 thousand USD in 2017 to 2,330,189 thousand USD in 2021. A notable acceleration in revenue growth occurred between 2019 and 2020, where the value more than doubled, indicating a significant expansion in scale.
- MVA Margin
- The MVA margin exhibited high volatility, fluctuating significantly regardless of the steady revenue increase. The margin peaked at 1,563.20% in 2020, following a previous spike of 1,338.51% in 2018. However, these peaks were interspersed with sharp declines, specifically in 2019 (782.03%) and 2021 (842.07%). The divergence between the 2021 revenue growth and the declining MVA margin suggests that market valuation did not keep pace with the company's operational revenue expansion in the final year of the period.
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