Enterprise Value to FCFF (EV/FCFF)
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Etsy Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2015
- Total Asset Turnover since 2015
- Price to Earnings (P/E) since 2015
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Etsy Inc., FCFF 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).
- Net cash provided by operating activities
- The net cash from operating activities shows a pronounced upward trend from 2017 to 2020, increasing from approximately $67.4 million in 2017 to nearly $679 million in 2020. This represents a nearly tenfold growth over the four-year period, indicating a significant improvement in operational cash generation capacity. However, in 2021, there is a marginal decline to around $652 million, which, while still substantially higher than previous years, suggests a potential plateau or slight deceleration in cash inflows from core business operations.
- Free cash flow to the firm (FCFF)
- The free cash flow available to the firm follows a similar upward trajectory as operating cash flow, starting at approximately $53.6 million in 2017 and increasing steadily through 2018 and 2019. FCFF peaks in 2020 at about $672 million, closely mirroring the operational cash flow trend. In 2021, the free cash flow decreases to roughly $560 million, marking a noticeable reduction compared to the prior year. Despite this decline, FCFF remains significantly elevated compared to the earlier years, indicating robust free cash generation but suggesting increased capital expenditures or other cash outflows affecting the residual free cash available.
- Summary of cash flow trends
- Overall, both operating cash flows and free cash flow to the firm present strong growth from 2017 through 2020, reflecting enhanced operational efficiency and strong cash generation capability. The decrease in 2021 across both metrics points to either increased operational costs, capital investments, or other uses of cash that temper the cash flow growth. The high level of cash flow in 2021 relative to earlier years still indicates a healthy financial position, although the slowing growth trend warrants attention for future cash flow sustainability.
Interest Paid, Net of Tax
Etsy Inc., interest paid, net of tax calculation
US$ 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).
2 2021 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate demonstrated a significant fluctuation over the analyzed period. It started at 35% in 2017, then dropped markedly to 21% in 2018 and remained constant at 21% through 2019. A considerable decrease occurred in 2020, where the rate fell sharply to 4.5%, representing a notable reduction in tax expenses relative to income for that year. However, in 2021, the EITR increased back to 21%, reverting to the level observed in 2018 and 2019. This pattern suggests episodic changes in tax strategy or tax law impacts, particularly the anomalously low rate in 2020.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest, net of tax, showed variability without a clear long-term upward or downward trend. Beginning at $4,911 thousand in 2017, it increased to $7,902 thousand in 2018, indicating higher interest expenses or increased borrowing during that period. The amount then decreased significantly to $2,533 thousand in 2019, followed by a moderate increase to $3,252 thousand in 2020. In 2021, the figure rose again to $4,783 thousand, approaching the initial value recorded in 2017. These fluctuations may reflect changes in debt levels, refinancing activities, or alterations in interest rates impacting the cost of borrowing.
Enterprise Value to FCFF Ratio, Current
Etsy Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Amazon.com Inc. | |
| Home Depot Inc. | |
| Lowe’s Cos. Inc. | |
| TJX Cos. Inc. | |
| EV/FCFF, Sector | |
| Consumer Discretionary Distribution & Retail | |
| EV/FCFF, Industry | |
| Consumer Discretionary | |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Etsy Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Discretionary | ||||||
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).
3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a significant upward trend from 2017 to 2020, increasing from approximately $2.81 billion to $27.21 billion. However, in 2021, the enterprise value decreased notably to around $20.32 billion. This indicates a period of rapid expansion followed by a contraction in market valuation or changes in capital structure during the last year observed.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed consistent growth from 2017 through 2020, increasing from about $53.6 million to $671.9 million. In 2021, there was a decline to approximately $560.1 million, suggesting some reduction in cash generation capability or increased capital expenditures impacting free cash flows.
- EV/FCFF Ratio
- The EV to FCFF ratio decreased overall from 52.36 in 2017 to 36.28 in 2021, despite fluctuations during the period. It declined steadily until 2019, indicating improving valuation relative to cash flow, then rose in 2020 to 40.5, before decreasing again in 2021. This suggests the market valuation became more aligned with the company's free cash flows over time, with some volatility in the intermediary years.