The company's latest earnings report showed decelerating growth (28% year-over-year sales growth vs. 46% in 2014) and higher spending (Etsy is aggressively spending money on marketing efforts). However, investors' top concern is perhaps Amazon's new "Handmade" marketplace. This is clearly meant as direct competition to Etsy, and had been the cause of several analyst downgrades and negative articles about the company.
While there is no debating Amazon's power, I think the fears are overblown in this case. First, it looks like Etsy will be cheaper for most sellers. Currently, Etsy charges sellers a $0.20 listing fee, plus 3.5% of each transaction. Amazon Handmade charges a flat fee of 12%, and bear in mind that this is a "promotional" rate, and could be significantly higher after the initial period expires in August 2016.
Plus, there is no reason the two sites can't successfully co-exist. There is nothing preventing sellers from listing on both websites, similarly to how many small businesses list items on both Amazon and eBay presently.
The number of active Etsy sellers grew by 26% in the past year, and the number of buyers is growing even faster. And, the company plans to ramp up hiring in the coming quarters and increase its investment in marketing even further. So, while Etsy isn't profitable yet, it is growing at a rapid pace and could reward investors who have the risk tolerance and patience to ride out any "growing pains."
Jason Hall : Lumber Liquidators ' stock has been crushed over the past year-plus. Since topping out at around $110 in early 2014, it's fallen to $19 and change on bad news and scandal ranging from slowing sales growth, to allegations of buying illegally harvested wood, to the more recent allegations that its Chinese-made laminate products contain potentially harmful levels of formaldehyde.
In short, investors have fled this stock like it had a combination of Ebola and swine flu.
And the company remains exposed. The Department of Justice is proceeding with charges under the Lacey Act related to the illegally harvested hardwood, which could cost tens of millions of dollars in fines. The company says it has fixed its sourcing processes, but fines are a foregone conclusion at this point.
The bigger risk concerns the formaldehyde allegations. While the California Air Resources Board -- the only government agency that regulates formaldehyde in consumer products -- has remained closed-lipped about the issue (indicating it's satisfied the company is meeting its requirements), the U.S. Consumer Products Safety Commission announced that it will conduct tests. If it finds the products produce potentially harmful levels of formaldehyde emissions, the financial and PR blow could be devastating.
The CPSC announcement said it will use "real-world" testing methods, which supports Lumber Liquidators' position that accusers haven't used proper testing methods. If the company has been straight with its claims, the CPSC testing could actually lead to vindication.
There remains risk. But even a glimmer of positive news is likely to send the stock shooting back up, and in a very big way.
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The article 3 Stocks That Could Double This Year originally appeared on Fool.com.
Jason Hall owns shares of Amazon.com and Lumber Liquidators. Matthew Frankel owns shares of eBay. Selena Maranjian owns shares of Amazon.com, eBay, and Priceline Group. The Motley Fool recommends Amazon.com, eBay, Lumber Liquidators, and Priceline Group. The Motley Fool owns shares of Amazon.com, eBay, Etsy,, Lumber Liquidators, and Priceline Group. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
