Updated from April 1 to include final pricing in the second paragraph.

NEW YORK (TheStreet) -- Etsy yesterday announced the final pricing of its IPO, but analysts are concerned that it may be seeking too rich a valuation.

The Brooklyn-based handmade-goods marketplace is opening up trading at $16 a share, at a $1.78 billion valuation despite losing $15.2 million in 2014 -- steeper than the company's $800,000 loss in 2013 -- on a 56% increase in revenue. The company offered up 13,333,333 shares for trading, and selling stockholders offered 3,333,333 shares, which would raise as much as $267 million for the firm.

"Kind of rich for a money-losing company with total revenue of $195.6 million in 2014," Jay R. Ritter, Cordell Professor of Finance at the University of Florida, said. "Although they have been growing rapidly, they have had to spend a lot on marketing to grow sales."

Etsy's IPO is being managed by Goldman Sachs Group Inc. (GS - Get Report), Morgan Stanley (MS - Get Report), and Allen & Co., and the retailer plans to list on the Nasdaq Stock Market under the symbol ETSY.

Etsy is going for the gold while some of its peers were more conservative in pricing their IPOs.

While Zulily (ZU), an online retailer that targets moms, sought 1.4 times its annual sales when it went public in November 2013, and online furniture retailer Wayfair (W - Get Report) sought two times its annual sales when it went public last October, Etsy is seeking up to 9.1 times its 2014 sales of $195.6 million.

Etsy has shown growth, with sales increasing 56% last year and the number of active buyers increasing 41.2% in the past year. But that doesn't necessarily mean it warrants the valuation it's going after, analysts say.

In its S-1 filing with the Securities and Exchange Commission, Etsy explicitly states as its first risk: "We have a history of operating losses and we may not achieve or maintain profitability in the future." 

While Etsy may draw comparisons to eBay (EBAY - Get Report) and other e-commerce firms, it faces unique challenges since it promises to sell mostly handmade goods and crafts. Merchants and consumers worry that an IPO may put the company in danger of straying from its roots, but investors and analysts worry that Etsy won't be able to scale to a large and profitable company if it doesn't embrace selling manufactured goods as well.

Etsy has already adapted its rules to allow merchants to include some non-handmade manufacturing in their products in October 2013, but this move alienated a large portion of its audience. The conflicting demands of its loyal user base versus Wall Street may find Etsy between a rock and a hard place.

One particularly worrisome metric is that Etsy's year-over-year growth rate in gross merchandise sales decreased to 43.3% in 2014 over 2013 from 50.6% in 2013 over 2012 .

"Not good," Francis Gaskins, research director for equities.com, said. "At 8 times revenue for a money-losing company, they'd better have several quarters of explosive sales increases lined up."

Etsy's financial health in 2014 was rated 23 out of 100 by Rapid Ratings, a 5-point decline from 2013. This places Etsy in the bottom half of Rapid Ratings' high risk group.

Though Etsy may have a bright future ahead of it, Manhattan Venture Partners analysts Santosh Rao and Max Wolff warn investors from jumping on board immediately.

"My gut is to say just hold off," Rao said. "It's definitely at the high end of its valuation spectrum. I wouldn't chase it at this point. Wait for the early noise to settle and come in slowly."