Shares in online marketplace Etsy (ETSY) were higher today as it hailed the power of AI for helping deliver better than expected first quarter revenues.
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It said revenues for the period came in at $651.2 million, up 0.8% compared with the same period last year and beating estimates of $642 million. It was helped by advertising revenue and seller set-up fees.
Gross merchandise sales fell 6.5% year over year to $2.79 billion, in line with estimates. For the second quarter, it expects sales to fall at a similar or “potentially slightly better” rate than the Q1 performance.
Active sellers on the platform fell 11.3% year over year to nearly 8.1 million, marking four straight quarters of declines. Active buyers also declined for the second consecutive quarter to 94.8 million.
It posted an EPS loss of $0.49 per share, worse than estimates of a $0.47 profit, largely due to a $101.7 million impairment charge from the sale of musical instrument marketplace Reverb.
Etsy chief executive Josh Silverman said that the overall group performance had been helped by the use of artificial intelligence and machine learning in its Etsy App helping to build better, more personalized engagement with customers and “encourage more frequent visits.”
Staying Nimble
Lanny Baker, Chief Financial Officer, said the group had a “rich portfolio of investments” to boost sales. He added that the group was also “staying nimble” in the face of uncertainty given President Trump’s tariffs policy and “fluid” consumer confidence.
Indeed, the company has established a “small operational task force” to address the tariffs, providing buyers and sellers with information including shipping timelines.
Is ETSY a Good Stock to Buy Now?
On TipRanks, ETSY has a Hold consensus based on 7 Buy, 14 Hold and 4 Sell ratings. Its highest price target is $72. ETSY stock’s consensus price target is $50.22 implying an 8.87% upside.
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