Buy Etsy Shares On The Pullback? Brean Thinks So

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In a report published Wednesday, Brean Capital analysts reiterated a Buy rating on
Etsy, Inc.
ETSY
. The price target was maintained at $23. The analysts believe that any pullback on the stock would offer an attractive buying opportunity. Etsy reported its results for the first quarter as a publicly traded company for 1Q15. According to the analysts, the company's operating performance for 1Q15 as well as the guidance for 2Q15 were "good not great." The overall results came in slightly below the estimates due to sales being affected by the strong US dollar, a trend that is likely to continue in 2Q15. According to the Brean Capital report, the highlight for the quarter was the higher than estimated seller services revenue growth of 72.3 percent. The key metrics for the quarter were mostly better than expected. "In our view, management's ability to drive seller services revenue (from advertising, payments, and shipping) will be one of the keys to the stock's long-term success, as it will enable the company to generate much higher revenue from its platform vs. only its marketplace effort," The analysts said. However, the analysts said that their core thesis that "Etsy operates a differentiated marketplace and has multiple levers to pull to drive sustainable long-term sales growth and adjusted EBITDA margin expansion" remains intact. Therefore, any pullback in the stock should be taken advantage of.
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Posted In: Analyst ColorReiterationAnalyst RatingsBrean Capital
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