Market Overview

Analysts Cautious About Etsy's Tone Despite Strong Q4 Earnings

Share:
Analysts Cautious About Etsy's Tone Despite Strong Q4 Earnings

Etsy Inc (NASDAQ: ETSY) shares soared Tuesday after reporting a big fourth-quarter earnings beat. The company also reported active buyers on its platform grew 18 percent in the quarter.

'Tone Felt Cautious'

Wedbush analyst Ygal Arounian said that while Etsy’s quarter was impressive, with the strongest GMS growth since the company went public, Etsy’s tone moving forward was prudent.

“Despite, the strong quarter and guide, the tone of the call felt a little more cautious. Management pointed to uncertainty around consumer spending in 2019 and a soft start to 1Q19 due to a pullback in marketing investment, just launched new product initiatives, and FX headwinds,” Arounian wrote in a note.

The analyst says investor attention turns to Etsy’s Investor Day set to be held March 7.

Arounian maintained a Neutral rating on Etsy and raised his price target from $50 to $60.

Morgan Stanley analyst Brian Nowak also noted Etsy’s cautious tone, but said the company has a history of taking a pragmatic approach with its guidance.

“To put the 17-20% guidance in perspective, ETSY grew GMS 21% in ‘18 after initially guiding to 14-16% in 4Q18. We think a key point of contention will be around ETSY’s commentary on the cadence of ‘19 GMS growth, with a soft start to 1Q due to a pull back in marketing spend, transitioning product initiatives following the holiday season, F/X headwinds, and a slowdown in macro consumer spending,” Nowak wrote.

The analyst maintained an Equal-Weight rating with a $49 price target.

Keybanc Upbeat On Growth Prospects

Keybanc analyst Edward Yruma took a more bullish stance, saying Etsy’s story is one of the most compelling in his coverage as the platform improvements and clarity of operational focus “are making the flywheel spin faster."

Yruma sees significant long-term growth opportunities and is increasingly confident in the company's international growth prospects.

“Etsy is unique within e-commerce with ~20% secular GMS growth, strong EBITDA margin, and a leading position in the 'special' market," Yruma wrote in a note. "We believe Etsy still has several visible self-help initiatives, and is becoming a much better retailer. We think new management’s initiatives to grow GMS and a renewed focus on operational discipline should position Etsy well going forward.”

Yruma maintains an Overweight rating and raised his price target from $59 to $75.

Etsy shares traded at $67.82 at time of publication, up 14.9 percent on the day..

Related Links:

Jim Cramer Gives His Opinion On Cronos, Etsy And More

Meet The Woman Who Turned Mean And Creepy Sexting Messages Into An Etsy Store

Latest Ratings for ETSY

DateFirmActionFromTo
Jan 2021Loop CapitalMaintainsBuy
Jan 2021KeyBancMaintainsOverweight
Jan 2021Morgan StanleyMaintainsUnderweight

View More Analyst Ratings for ETSY
View the Latest Analyst Ratings

 

Related Articles (ETSY)

View Comments and Join the Discussion!

Posted-In: Brian NowakAnalyst Color Earnings Long Ideas Price Target Top Stories Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
AMZNStifelMaintains3,600.0
MSFTB of A SecuritiesMaintains280.0
MSFTOppenheimerMaintains275.0
MSFTBarclaysMaintains269.0
MSFTBMO CapitalMaintains270.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com