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Etsy, Inc. (ETSY) is a prominent e-commerce service provider recognized for its marketplace platform, Etsy.com. Based in Brooklyn, New York, and valued at $6.5 billion by market cap, Etsy distinguishes itself in the e-commerce industry through its dynamic community of artisans and buyers, focusing on handmade, vintage items, and craft supplies.
Etsy has significantly underperformed the broader market over the last year. The stock has declined 33.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 17%. In 2024 alone, the stock has lost 33.4%, compared to SPX's 9.9% gains on a YTD basis.
Zooming in further, ETSY has also lagged behind the ProShares Online Retail ETF’s (ONLN) 8.1% returns over the past year. Besides, the stock's double-digit YTD loss is far behind the exchange-traded fund's 6.8% returns over the same time frame.
Over the past year, the general macroeconomic slowdown affecting consumer discretionary spending has negatively impacted Etsy’s stock performance.
Since its Q2 earnings report was released on July 31, shares of Etsy have been trending downward after a brief uptick. The company reported an EPS of 41 cents, missing the consensus estimate of 45 cents. While it surpassed consensus revenue expectations, the market is upset with Etsy's forecast for a Q3 adjusted EBITDA margin of around 27%, which falls short of the consensus expectation of 28.9%.
For the current fiscal year, ending in December 2024, analysts expect ETSY’s EPS to decline by 15.4% year over year to $2.37 on a diluted basis. The company's earnings surprise history is mixed. It beat or matched the consensus estimate in two of the last four quarters and missed on two other occasions.
Among the 26 analysts covering ETSY stock, the overall consensus rating is a “Hold,” a step down from a “Moderate Buy” rating two months before. That’s based on six “Strong Buy” ratings, two “Moderate Buys,” 14 “Holds,” two “Moderate Sells,” and two “Strong Sells.”
This configuration is slightly less bullish than two months before, with eight analysts suggesting a “Strong Buy.”
On Jul. 26, Youssef Squali, an analyst at Truist Securities, reaffirmed his “Buy” rating for Etsy stock and increased the price target from $75 to $77.
The mean price target of $68.82 represents a 27.5% premium from ETSY’s current price levels. The Street-high price target of $105 suggests an impressive upside potential of 94.5%.
On the date of publication, Kritika Sarmah 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.
