Etsy reported third-quarter earnings after the market Wednesday that beat on revenue and matched estimates on earnings. However $ETSY lowered guidance and margins leading to analysts downgrading price targets sending the stock down over 15%.
Etsy reported third-quarter earnings after the market Wednesday that beat on revenue and matched estimates on earnings. However $ETSY lowered guidance and margins leading to analysts downgrading price targets sending the stock down over 15%.
Etsy Inc NASDAQ: ETSY Q3 Earnings
Etsy Inc NASDAQ: ETSY Reported Earnings After Close Wednesday
$0.12 Met $0.12 EPS Forecast And $197.95 Million Beat $193.5 Mil Revenue Forecast
Earnings
Etsy reported adjusted earnings of 12 cents per share on revenue that jumped by 32% to $197.95 million. Wall Street had expected earnings of 12 cents on revenue of $193.5 million. Gross merchandise sales were up 30% to $41.2 billion, This is driven by growth in both Marketplace and Services revenue.
Etsy Inc NASDAQ: ETSY
Market Reaction: Close $44.49 USD −8.31 ($15.74%)
Highlights
- Active buyers grew 21% year-over-year in the third quarter, and active sellers grew 27% year-over-year.
- The marketing expense, specifically the investment in the TV campaign, drove operating expenses higher by 36%.
Outlook
- Etsy lowered full-year guidance on earnings before interest, tax, depreciation and amortization, or EBITDA.
- Margin guidance was lowered to a range of 22% to 23% from a prior view of 22% to 24%.
- Etsy raised its full-year 2019 revenue guidance to a range of $809 million to $815 million from the previous range of $797 million to $809 million.
- Gross merchandise sales are now anticipated to rise 25% to 26% to the range of $4.9 billion to $5 billion for the full year 2019.
- Adjusted EBITDA margin forecast is narrowed to the range of $179 million to $187 million from the earlier range of $177 million to $193 million.
Analysts Lower Price Targets
- Wedbush maintained its Outperform rating with a $66 target price, noting that the quarter had a lot of noise and that the efforts to make changes are in their very earliest stages.
- Morgan Stanley reiterated its Equal Weight rating and lowered its target to $52 from $57.
- KeyBanc Capital Markets maintained its Overweight rating but lowered its target price to $78 from $90.
- Nomura/Instinet reiterated its Buy rating but lowered its target price from $70 to $61.
Source: Etsy
From The TradersCommunity Research Desk