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'Back up the truck' on Etsy: Analyst

Shares of Etsy tanked 18 percent in the after-hours trade on Tuesday when the online craft marketplace reported a loss more than seven times larger than the previous year, but one analyst says it's time to "back up the truck" and buy more shares.

"If it breaks its IPO price, it's time to back up the truck," said Brean Capital Senior Analyst Tom Forte to the "Fast Money" traders on Tuesday.

Etsy did indeed break below its $16 IPO price on Wednesday morning, falling as much as 24.5 percent to $15.86.

According to Forte, many of the issues affecting Etsy are one-time items and should be discounted. Specifically, he sees currency headwinds and hiring costs as temporary disruptions in a long-term growth story.

"I look at it as an opportunity to buy a compelling company that has multiple levers to pull long-term growth, and I think you take advantage of the opportunities to get into those companies when you can," said Forte.

Forte has a "buy" rating on Etsy and a $23 price target which is based on the company's achieving a 21 percent long-term adjusted EBITDA margin. Etsy reported an EBITDA margin on Tuesday of 9.3 percent.

In the online marketplace's first report as a public company, Etsy suffered a loss of 84 cents per share on revenue of $85.5 million.

Management noted that headwinds from the strong dollar are continuing to pressure international buyers, a trend that largely affected e-commerce and retail companies this quarter. Currently 30 percent of Etsy's business comes from outside the U.S.

In addition, Etsy explained that expenses would increase in the coming months due to hiring and marketing costs.

"I think there is nothing fundamentally wrong with this story and this is a buying opportunity," said Forte.