Brean's Tom Forte: Buy Etsy, It's On Cusp Of 'Strong Results'

In a report published Tuesday, Brean Capital analyst Tom Forte reiterated a Buy rating and price target of $23 on

. The analyst expects the company to report strong results for 2Q15. Although the company does not provide specific quarterly guidance on EPS, adjusted EBITDA and sales, the management is expected to detail some qualitative items for forthcoming quarters, as it did while reporting the 1Q15 earnings. The analyst expects Etsy to report total sales growth of 41.8 percent, which would drive revenue of $60 million, in line with the consensus projections. Specifically, revenue from the Seller Services business is expected to have grown by 68.2 percent during the quarter, accounting for 46.3 percent of the total sales. On the other hand, the adjusted EBITDA is expected to decline 61.9 percent, year on year, due to investments in headcount and advertising. The adjusted EBITDA is expected to come in well below the consensus. The analyst also expects the company to report GAAP EPS loss of $0.06, as compared to the consensus forecast of a loss of $0.05. However, active buyers are expected to have increased 33.5 percent, while active sellers are expected to have grown by 23.5 percent.