Etsy Stock Fell After Its Results Revealed Additional Customer Data

Etsy Stock

Etsy Stock (NASDAQ:ETSY)

The fourth-quarter earnings report for Etsy (NASDAQ:ETSY) is scheduled on Tuesday after the market closes. The business hopes to build on its over 40% gain since early November by sharing strong numbers.

The revelation follows a warning from Walmart yesterday that customers would be under duress until 2023. In the wake of the Walmart report and Home Depot’s comparable remark on Tuesday, several stocks in the consumer discretionary sector, including those of major e-commerce sites, fell substantially.

The online retailer headquartered in San Francisco is anticipated to declare quarterly profits of $1.12 per share on sales of $751.65 million. Six and seven different higher revisions to EPS predictions have been made by analysts in the 90 days leading up to results. The company’s earnings per share and sales have surpassed projections for eight consecutive quarters.

UBS and Evercore, two research firms, have both referred to Q4 channel inspections that were encouraging. App downloads and user interaction in the fourth quarter may signal market share growth, according to Evercore ISI research. On the other hand, UBS reported that, during a recent conference, management expressed optimism about the company’s competitive position and made optimistic predictions about acquiring new buyers and increasing intake rates.

The company’s fourth-quarter take rate is anticipated to be 19.4 percent. There should be 7.7 million active vendors and 94.1 million active buyers on the platform at the end of the reporting period.

Anna Andreeva, a researcher at Needham, gave the Etsy stock a Buy recommendation in January, expecting the company’s forthcoming earnings prints to be strong. The general opinion of analysts agrees with her evaluation.

She informed clients that “positive earnings revisions and multiple expansion should drive share upside from here” since “pandemic demand has been essentially lapped” and “sell-side estimates are in a decent spot” (we anticipate a cautious 1Q23 guidance, but buy-side is already there, and comparisons relax meaningfully following”).

Nevertheless, not all analysts are bullish, especially in light of the dismal earnings results from several retailers and consumer-facing businesses thus far this earnings season. Wolfe Research assigned a Hold recommendation to the company in January because of fears that the price will continue to be volatile due to macro repercussions on consumer spending generally.

A retail sales study released just before this one predicted poor beginning 2023 performance from non-store merchants. From January 2022 to January 2023, sales in the category that includes e-commerce increased by 3%, according to the statistics, which is less than half of the total 6.4% gain in retail sales for the same period.

Moreover, after a negative report from Andrew Left’s Citron Research, Etsy stock fell before results day.

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