Online marketplace ETSY (ETSY) is set to release its Q2 earnings report this week. This has some investors wondering whether it’s a good idea to buy shares of ETSY stock beforehand.
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What Wall Street Expects
Wall Street is expecting Etsy to report quarterly earnings of $0.54 per share, meaning a year-over-year increase of 31.7%. It is anticipated that revenues will come in at $648.01 million, representing no change compared to the same period last year.
Will Etsy be able to beat these estimates? As can be seen below, it has a mixed record in doing just that in recent quarters.
Key Issues Ahead of Earnings
In Q1 Etsy 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.
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. 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 – see below.
Ahead of Q2, the key issue highlighted by analysts is how Etsy stock is holding up in the face of tariff uncertainty and fragile consumer confidence.
Maria Ripps, analyst at Canaccord recently raised its price target on Etsy to $68 from $62 and kept a Buy rating on the shares. She said Etsy shares continue to trade at valuations that reflect limited optimism around the macro backdrop. Canaccord said despite lingering tariff-related uncertainty, the US consumer remains resilient, with hard and soft economic data continuing to edge up.
Trevor Young, analyst at Barclays lowered the firm’s price target to $52 from $53 and kept an Equal Weight rating on the shares as part of a Q2 preview for the e-commerce group. The firm believes discretionary spending is holding up but sees some risks in the back half of the year from tariffs.
Bryan Smilek of JPMorgan raised the firm’s price target on Etsy to $53 from $50 and kept a Neutral rating on the shares. He also believes Etsy’s app trends continue to improve. Indeed, in Q1 Etsy said the app, powered by AI, was helping it to build better, more personalized engagement with customers and “encourage more frequent visits.”
Is ETSY a Good Stock to Buy Now?
On TipRanks, Etsy has a Hold consensus based on 8 Buy, 12 Hold and 4 Sell ratings. Its highest price target is $71. Etsy stock’s consensus price target is $52.73, implying a 15.97% downside.
