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Etsy, Inc. (ETSY) is a leading e-commerce service provider best known for its two-sided marketplace platform, Etsy.com. Founded in 2005 and headquartered in Brooklyn, New York, it stands out in the e-commerce sector for its vibrant community of creators and shoppers, emphasizing handmade, vintage items and craft supplies. Valued at $7.5 billion by market cap, its niche focus on personalized and one-of-a-kind products has solidified its position as a go-to platform for unique goods.
Etsy has significantly underperformed the broader market over the last year. The stock has declined 28.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.6%. In 2024 alone, the stock has lost 21.8%, compared to SPX's 11.3% gains on a YTD basis.
Narrowing the focus, ETSY lagged behind the Global X E-commerce ETF (EBIZ) 45.7% return over the past year. Also, the stock's YTD loss is far behind the exchange-traded fund's 17% returns over the same time frame.
The company reported a marginal increase in revenue to $645 million for Q1, but its gross merchandise sales (GMS) dropped 3.7% year-over-year to $2.98 billion. The quarterly report cited challenges in consolidating GMS, including a tough macroeconomic environment affecting discretionary consumer spending and the impact of divesting Elo7 in 2023. The stock lost more than 15% following its earnings release on May 1.
For the current fiscal year, ending in December 2024, analysts expect ETSY’s EPS to decline by 11.4% year over year to $2.48 on a diluted basis. The company's earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters and missed on another occasion.
Among the 26 analysts covering ETSY stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, two “Moderate Buys,” 12 “Holds,” two “Moderate Sells,” and two “Strong Sells.”
This configuration is slightly less bullish than three months before, with 10 analysts suggesting a "Strong Buy."
On May 20, BTIG analyst Marvin Fong maintained a “Buy” rating on Etsy with a price target of $78.00. However, Morgan Stanley (MS) analyst Nathan Feather maintained a “Sell” rating on Etsy with a price target of $52.00.
The mean price target of $73.80 represents a 15.1% premium to ETSY’s current price levels. The Street-high price target of $110 suggests an ambitious upside potential of 71.5%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
