Core Viewpoint - Wall Street anticipates a year-over-year decline in Etsy's earnings despite an increase in revenues, with the upcoming earnings report being crucial for stock price movement [1] Group 1: Earnings Expectations - Etsy is expected to report quarterly earnings of $0.54 per share, reflecting a year-over-year decrease of 15.6% [2] - Revenue projections stand at $654.63 million, indicating a 2.9% increase from the previous year [2] Group 2: Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analyst expectations [3] - The Most Accurate Estimate for Etsy is lower than the Zacks Consensus Estimate, leading to an Earnings ESP of -7.79%, indicating a bearish outlook from analysts [6] Group 3: Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [5] - Etsy currently holds a Zacks Rank of 3, making it challenging to predict a beat on the consensus EPS estimate [7] Group 4: Historical Performance - In the last reported quarter, Etsy was expected to post earnings of $0.46 per share but only achieved $0.41, resulting in a surprise of -10.87% [8] - Over the past four quarters, Etsy has only beaten consensus EPS estimates once [8] Group 5: Conclusion - An earnings beat or miss is not the sole determinant of stock price movement, as other factors can influence investor sentiment [9] - Etsy does not appear to be a compelling candidate for an earnings beat, and investors should consider additional factors before making decisions [9]

Core Insights - E-commerce platform Etsy was a significant beneficiary during the Covid-19 pandemic as consumers turned to online shopping due to confinement and lack of travel options [1] Company Analysis - Etsy experienced a surge in demand as consumers, supported by stimulus checks, shifted their spending from experiences to online purchases [1] Industry Trends - The pandemic accelerated the growth of e-commerce, highlighting a shift in consumer behavior towards online shopping platforms like Etsy [1]

BROOKLYN, N.Y., Oct. 16, 2024 /PRNewswire/ -- Etsy, Inc. (Nasdaq: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, plans to release its third quarter 2024 financial results after market close on Wednesday, October 30, 2024. The press release can be accessed on the Etsy Investor Relations website (investors.etsy.com). Etsy will also host a video webcast conference call to discuss those results at 5:00 p.m. Eastern Time o ...

Group 1 - Etsy Inc has experienced a 38% decline in shares year to date, facing increasing competition [1] - Goldman Sachs has downgraded Etsy's rating from Neutral to Sell, reducing the price target from $70 to $45 [1][2] - Analyst Eric Sheridan highlighted that gross merchandise sales have been declining longer than expected, with limited visibility into a return to positive growth [2] Group 2 - The Etsy Marketplace is projected to continue losing market share in global eCommerce sales, driven by muted active buyer growth and a competitive landscape [3] - Current Street expectations suggest a significant reacceleration in gross merchandise volume, despite low visibility on catalysts [4] - The risk/reward profile for Etsy remains unfavorable due to potential negative revisions to medium-term consensus estimates [4]

Group 1 - Goldman Sachs downgraded Etsy Inc (NASDAQ:ETSY) to "sell" from "neutral" and lowered its price target to $45 from $70, citing expectations of continued market share loss amid increased competition [1] - Etsy's stock is down 39.3% in 2024 and recently hit a four-year low of $48.06, trading below all moving averages between the 20- and 320-day trendlines [1] - Despite the downgrade, Etsy's shares rose by 1.9% to $50.52 at the last glance [1] Group 2 - In the options market, Etsy has seen double the typical amount of call options, with the October 52 call being the most popular [2] - The equity's 50-day call/put volume ratio stands at 2.75, which is higher than all other readings from the past year [2] Group 3 - Short interest in Etsy represents 15% of the stock's available float, indicating it would take over four days for shorts to cover at the average trading pace [3]

Core Viewpoint - Etsy's stock has significantly declined since its pandemic peak, raising questions about its recovery potential in the coming years [2][6]. Company Overview - Etsy is an established e-commerce marketplace founded in 2005, focusing on handmade, vintage, and craft items, which gained popularity during the COVID-19 pandemic [3]. - The company went public in 2015 and experienced a stock price surge during the pandemic due to increased online shopping [3]. Recent Performance - Etsy's stock has dropped 84% from its all-time high of $297 in late 2021, leading to concerns about the company's stability [6]. - In Q2 2023, Etsy reported revenue of $647.8 million, a 3% year-over-year increase, compared to $528.9 million in Q2 2021, indicating continued top-line growth [7]. - Gross margins remained stable at approximately 72%, but operating margins fell from 17% to 11%, primarily due to rising overhead costs [7][8]. Competitive Landscape - Etsy faces increasing competition from Chinese online marketplaces like Shein and Temu, which offer low-cost apparel alternatives, as well as from Amazon's handmade store [5]. Future Outlook - The company needs to shift its focus towards cost-cutting and efficiency, especially after laying off around 11% of its staff in late 2023 [9][10]. - The forward price-to-earnings (P/E) ratio of 13 indicates that Etsy is trading at a significant discount compared to the S&P 500 estimate of 24, suggesting potential for value-focused investors [11].

Core Viewpoint - Etsy, despite being removed from the S&P 500 index, is positioned for potential outperformance due to its unique product offerings, strong cash generation, and significant share repurchases [1][4]. Group 1: Company Performance and Growth - Etsy has experienced annual sales and free cash flow (FCF) growth of 36% and 42% respectively since 2017, driven by its unique, often personalized goods [6]. - The company's market capitalization has decreased from over $30 billion to around $6 billion due to a slowdown in sales growth post-pandemic [7]. - Etsy's FCF is now 11 times higher than it was in 2017, indicating a stronger business foundation [8]. Group 2: Financial Metrics and Valuation - Etsy boasts a cash return on invested capital (ROIC) of 40%, which is competitive among S&P 500 stocks and suggests future outperformance [9]. - The company has a robust FCF margin of 25% and has reduced its share count by 9% over the last three years through share buybacks [10]. - Currently, Etsy's FCF yield stands at 9.6%, the highest level in the last decade, and trades at 15 times FCF, making it approximately half as expensive as the average S&P 500 stock [13]. Group 3: Strategic Initiatives - Management is focusing on enhancing the mobile app experience, with only 45% of buyers currently using it, compared to higher adoption rates for competitors like Amazon [11]. - Increasing mobile app penetration could significantly boost purchase frequency, as mobile app users generate 75% more purchase days [12]. - Minor improvements in mobile app usage or search experience could lead to rapid growth, enhancing Etsy's valuation [14]. Group 4: Historical Context and Future Outlook - Historical data suggests that stocks removed from major indexes often outperform the market by five percentage points annually over the following five years [2][3]. - Etsy's current valuation presents a unique investment opportunity, as the company has matured into a significant cash-generating entity [15].

Core Viewpoint - The market sentiment towards Etsy has declined as it struggles to maintain growth post-pandemic, leading to its removal from the S&P 500 index due to its smaller market capitalization [1][3][4]. Group 1: Etsy's Market Position - Etsy was removed from the S&P 500 index and placed into the S&P SmallCap 600, reflecting its reduced market cap of $6.3 billion, which has decreased by 56% since its peak [3]. - The stock has declined by 33% year to date, indicating a lack of investor confidence despite its previous growth [3][4]. - Etsy's revenue continues to grow, but at a slower pace, and it remains profitable with a forward P/E ratio of 11, suggesting it may be undervalued [5]. Group 2: Comparison with Amazon - Amazon has launched competing platforms like Amazon Handmade to capture market share in the handmade goods sector, demonstrating its ability to adapt and innovate [7][8]. - Over the past five years, Etsy's stock has decreased by 3%, while Amazon's stock has increased by 122%, highlighting the stark contrast in their market performances [9]. - Amazon's diverse growth prospects in e-commerce, cloud computing, and advertising make it a more attractive investment option compared to Etsy [10][13]. Group 3: E-commerce Trends - E-commerce sales accounted for 19.7% of total retail sales last year and are projected to reach 20.7% in 2024, indicating ongoing growth in the sector that benefits larger players like Amazon [13].

This fallen angel is gaining the attention of contrarian investors. It has been a challenging time for investors in Etsy (ETSY -0.73%). The stock hit a multi-year low when the general market reached multiple all-time highs. Weak business performance and its recent removal from the S&P 500 index are critical drivers for its poor stock performance. Still, contrarian investors have started to pay attention to the stock as they look for opportunities to buy it cheaply. But is now a good time to load up on Etsy' ...

There's remarkable reason to believe this stock is set up for strong performance in coming years. In September 2020, e-commerce company Etsy (ETSY 7.56%) was included in the S&P 500 -- an index of about 500 of the biggest, most profitable U.S. companies. Indeed, 2020 was a bumper year for the company, with revenue more than doubling from 2019. The booming business earned about $350 million in net income from the year, which is likely why it was deemed a good candidate for the S&P 500. According to a recent ...