Etsy (ETSY) PT Lowered to $80 at Evercore ISI

Evercore ISI analyst Mark Mahaney lowered the price target on Etsy (NASDAQ: ETSY) to $80.00 (from $90.00) while maintaining a Outperform rating.

The analyst comments "In the wake of In-Line & Lower Q1 EPS results, we are trimming ETSY PT to $80, but patiently sticking with our Outperform. Here are the numbers: Revenue of $646MM and EBITDA of $168MM largely in-line with ISI/Street (with 26.0% EBITDA Margin right on the dot with guidance), GMS of $3.0B was -1% below the Street, with modest Marketplace outperformance and consolidated take rate of 21.6% a smidgeon above the Street/guide. Guidance: Q2 GMS guide of LSD-MSD% Y/Y decline disappointed the Street (which estimated flat Y/Y GMS) and largely in-line with ISI. And while mgmt. largely reiterated FY24 take rate and margin guide, full year GMS guide now suggests a more back-end weighted acceleration vs. prior guide, with mgmt. pointing to continued macro challenges pressuring GMS/Active Buyer, while new product launches are still in the early stages of rollout & iteration. While we expect Street estimates to only modestly come down, the material -12% pullback on the stock aftermarket may be a reflection of some degree of capitulation – Bears would point to a continued weak macro environment, competitive pressure (from both big box retailers and discount e-Commerce players), and a product cycle that is yet to be proven out. In our small cap preview, we called out ETSY as one of the 3 most risky SMID ‘Nets into the print primarily due to this persistent consumer discretionary weakness, and we expect ETSY to trade sideways in the near-term. That said, with shares trading at 10X our ’25 EBITDA on depressed topline growth and margins, a moderated FY24 GMS outlook from mgmt. that assumes no material macro recovery, and a robust product roadmap this year that may well start to build user engagement and buyer conversion, we think the risk/reward profile is starting to look interesting. Hence, we are patiently sticking with our Outperform rating."

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