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Brooklyn, New York-based Etsy, Inc. (ETSY) is an e-commerce service provider. It operates a two-sided online marketplace platform that connects artisans and entrepreneurs with consumers. With a market cap of $7 billion, Etsy’s operations span multiple countries in the Americas, Europe, and internationally. It is expected to announce its Q2 earnings after market closes on Wednesday, July 31.
Ahead of the event, analysts expect Etsy to report a profit of $0.46 per share, down 44.6% from $0.83 per share reported in the year-ago quarter. The company has surpassed or matched Wall Street’s EPS projections in three of the past four quarters while missing on one other occasion. Its EPS for the last reported quarter declined by 9.4% year over year to $0.48 and missed the projections by 2%.
Looking ahead to fiscal 2024, analysts expect Etsy to report an EPS of $2.47, down 11.8% from $2.80 in fiscal 2023. However, in fiscal 2025, its EPS is expected to grow 14.2% year over year to $2.82.
ETSY stock is down 25.7% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 13.8% gains and the S&P 500 Cons Disc Sector SPDR’s (XLY) 1.4% returns over the same time frame.
Etsy stock plunged 15.1% in the subsequent trading session after its Q1 earnings release on May 1. The company reported a 15.5% drop in net income and witnessed lackluster growth in active buyers and gross merchandise sales compared to the year-ago quarter, falling short of Wall Street’s expectations. This decline was largely due to the overall macroeconomic slowdown impacting consumer discretionary spending.
However, Etsy boasts a loyal user base in a niche market, and a strong community of buyers and sellers has helped it maintain resilient revenue levels. In the previous quarter, Etsy repurchased shares worth $158.3 million, demonstrating its confidence in the company’s valuation and a commitment to returning value to shareholders.
The consensus opinion on Etsy stock is neutral, with an overall “Hold” rating, a step down from the “Moderate Buy” rating of two months before. Out of the 25 analysts covering the stock, six recommend a “Strong Buy,” two advise a “Moderate Buy,” 13 advise a “Hold,” two advocate a “Moderate Sell,” and the remaining two analysts give it a “Strong Sell” rating.
The average target price for Etsy stock is $69.04, indicating a potential upside of 14.6% from current price levels.
On the date of publication, Sristi Jayaswal 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.
