- Relief as shares stage recovery rally
- Q1 revenues and earnings beat 'The Street'
- Toned down Q2 growth still sees 11% increase year-on-year
Investors might well have been nervous ahead of latest earnings from arts and crafts consumer platform Etsy (ETSY:NASDAQ). These were the first quarterly figures since a report (17 Feb) by short seller Citron Research that alleged the company is ‘one of the largest counterfeiting platforms in the world.’
Effectively being accused of flogging hooky goods on a scale that would make Del Boy and Rodders blush had hung over the share price in the weeks since, losing nearly 24%.
But latest earnings gave the stock a lift that will be welcomed by investor fans, and the shares are set to open later today up 3%, according to pre-market data, putting the stock back into three-digits at $101.90.
Brooklyn-based Etsy reported first-quarter earnings and revenue overnight that topped analyst estimates, even if the revenue outlook came in below expectations. The e-commerce marketplace reported earnings of $0.53 for the quarter ending 31 March, down 12% from a year earlier but above the $0.51 anticipated by analysts.
GROWTH GUIDANCE TONED DOWN
Revenue up 11% at $640.9 million also beat ‘The Street’, nearly 3.5% better.
Gross merchandise sales, or the dollar value of items sold across all Etsy marketplaces, rose 4.6% to $3.1 billion. That topped Wall Street estimates of $3.06 billion.
That said, the company believes analyst expectations for second quarter growth have got a bit ahead of themselves. Q2 sales are now seen at around $615 million, at the midpoint of management’s outlook, below estimates of $627 million.
That would still imply almost 11% growth year-on-year in Q2.
Analysts see the share price recovery continuing, with the average target pitched for the stock at $129, about 30% up from current levels. Of the 29 analyst that follow the stock, 16 are telling clients to buy versus two sellers, according to Koyfin data.
