Market Overview

Etsy Analysts Mostly Positive Despite Slight Q1 Revenue Miss

Etsy Analysts Mostly Positive Despite Slight Q1 Revenue Miss

Etsy, Inc. (NASDAQ: ETSY) shares were dropping Thursday after the e-commerce company fell short of first-quarter revenue estimates. But analysts chose to focus on the company’s earnings beat and higher company expectations for gross merchandise sales and revenue growth, with several continuing to keep Buy ratings on the stock.

Etsy reported quarterly earnings of 24 cents per share, beating Street expectations by a full dime, or more than 70 percent. Quarterly sales of $169.3 million just missed the Street estimate of $170.1 million.

The stock, which hit a record high in March, dropped after the report Wednesday and was continuing to fall on Thursday.

The Analysts

KeyBanc Capital Markets' Edward Yruma maintained an Overweight rating on Etsy with a $90 price target.

RBC Capital Markets' Shweta Khajuria reiterated a Sector Perform rating and $60 price target.

D.A. Davidson’s Tom Forte reiterated a Buy rating and $78 price target on Etsy.

Morgan Stanley’s Brian Nowak maintained an Equal-weight rating on the stock and raised the price target from $65 to $66. 

Wedbush's Ygal Arounian maintained a Neutral rating on Etsy, with a $60 target price.

The Takeaways 

KeyBanc’s Yruma is taking the long view. “We think Etsy remains one of the most compelling long-term secular stories in our coverage,” he said in a Wednesday note to investors.

RBC’s Khajuria said Brooklyn-based Etsy has a large total addressable market, a loyal community of sellers and buyers and has new marketing and product initiatives that should help it retain and attract customers.

“We continue to believe that Etsy is well-positioned to drive long-term growth with improving profitability,” the analyst said in a Wednesday note. 

D.A. Davidson’s Forte said quarterly gross merchandise sales of 19 percent came despite a pullback in marketing spending. The sell-off in the previous 24 hours may be an opportunity, he said: "we would take advantage of any pullback to buy shares." 

Morgan Stanley’s Nowak was also unfazed by investors’ bearish sentiment.

“A solid 1Q and upward FY19 guidance revision underscore Etsy's ability to continue investing behind long-term growth while still generating near-term GMS/EBITDA upside,” the analyst said in a Thursday note. 

Wedbush's Arounian said investors have higher expectations for what has been an online merchandising darling.

“Etsy delivered another quarter of (gross merchandise sales) growth above expectations and saw a strong finish to the quarter despite weakness in January-February, but investors were looking for more from results and full year guidance,” the analyst said in a Thursday note. 

Etsy’s management team has done well to turn around a “challenged business model” and reaccelerated sales, he said. Long-term, though, a craft marketplace is one in which it’s tough to move buyers to visit more frequently, Arounian said. 

Price Action

Etsy shares were down 11.31 percent at $60.38 at the time of publication Thursday. 

Related Links:

Analysts Cautious About Etsy's Tone Despite Strong Q4 Earnings

Jim Cramer Gives His Opinion On Cronos, Etsy And More

Photo courtesy of Etsy. 

Latest Ratings for ETSY

Oct 2020Deutsche BankMaintainsBuy
Oct 2020StifelMaintainsBuy
Oct 2020Canaccord GenuityMaintainsBuy

View More Analyst Ratings for ETSY
View the Latest Analyst Ratings


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