Etsy Inc. (ETSY: NSD) saw a significant downturn due to mixed Q4 results and issued weaker-than-expected guidance for the first quarter of 2024.
Key Earning Highlights from Etsy’s Q4 Report:
Here are the key insights from Etsy’s Q4 Earnings Report
- Earnings per share (EPS): $0.62, missing analyst estimates of $0.78
- Revenue: $842.3 million, beating analyst estimates of $827.81 million but representing a 4.3% year-over-year increase, slower than previous quarters
- Gross Merchandise Sales (GMS): $4.0 billion, down 0.7% year-over-year
- First-quarter 2024 GMS: Expected to decline in the low-single-digit range year-over-year, potentially reaching mid-single digits if trends don’t improve.
What Does Stock Target Advisor Say About Etsy?
Stock Target Advisor maintains a Buy rating for Etsy’s stock despite the concerning results, citing a few positive signals along with the negatives. These positive signals include superior risk-adjusted returns, strong revenue growth, and robust positive cash flow. However, analyses also indicate negative signals such as the stock’s overpricing compared to its book value, high volatility, and diminished earnings growth.
Stock Target Advisor cites an average analyst target price of USD 80.77, with the last closing price for Etsy’s stock at USD 77.13.
Investor Reaction and Future Outlook:
The mixed results and weak guidance sent Etsy shares tumbling 5.81% in after-hours trading. This follows a period of declining stock prices for the company, which has seen its share value drop by over 20% year-to-date.
When compared to other equity in the same sector on the NSD exchange, it appears that Etsy faces stiff competition. However, STA holds a Slightly Bullish rating for the sector. This rating, alongside analyzing average returns and prominent stocks in the sector, can be crucial when formulating an investment strategy.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
