Etsy is the IBD Stock Of The Day, as the e-commerce dealer gains traction after a difficult period. Etsy stock surged Monday.
The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that, in the last few years, has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.
Early this month, Needham analyst Anna Andreeva upgraded Etsy stock to a buy, from hold. She has a price target of 160.
"Etsy stock has been in a long consolidation period," she wrote in a note to clients. "Positive earnings revisions and multiple expansion should drive share upside from here."
For Etsy's first quarter Andreeva expects "positive earnings revisions and multiple expansion that should drive share upside from here."
The company has not yet set a date for its fourth-quarter earnings report.
Etsy Stock Action
Etsy stock jumped 5.5% to close at 139.12 on the stock market today.
The stock has been in a consolidation with a buy point of 142.63. But on Monday, shares surged past an early entry point of 136.91 for investors.
During the early stages of the pandemic, Etsy was a big beneficiary. Stuck-at-home shoppers turned to Etsy and other online retailers for both essential and nonessential items.
As the virus caused dramatic changes to daily living, Etsy sellers moved quickly to help consumers deal with the rapidly evolving needs.
While the pandemic started subsiding, e-commerce plays such as Etsy stock were pounded as the incentive for consumers to buy online dropped.
Social Media Stocks Fell
As a result, social media stocks such as Snap and Pinterest also fell well below their highs for various reasons.
A weak market for digital advertising didn't help, especially after Apple made changes to its privacy settings on its operating system. The changes reduced the ability of social media companies to target ads based on users' likes and dislikes.
Ads account for the bulk of revenue these companies receive.
Etsy reported third-quarter results in early November. Revenue climbed 12% from the year-ago period to $594.5 million, outperforming expectations. Adjusted earnings fell 65% to 58 cents a share, as expected.
Etsy stock jumped 10% on the news. For its fourth quarter, analysts expect revenue of $753 million, up 5%. Their estimate on adjusted earnings is 80 cents a share, down 28%.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
