Etsy (ETSY) tumbles 9% on soft guidance; Bernstein cuts rating

Etsy (NASDAQ: ETSY) saw its stock tumble almost 9% after reporting a weaker-than-expected Q2 earnings report.

Etsy posted a profit per share of 45 cents on revenue of $628.9 million, which compares to the consensus for a profit per share of 42 cents on revenue of $618.6M. Gross merchandise value (GMV) came in at $3.01 billion, down 0.6% year-over-year.

"The Etsy marketplace's active buyers reached an all-time high in the second quarter, signaling the relevance of our brand and our ability to create opportunities for our sellers. This growth in buyers helped our core marketplace return to year-over-year GMS growth in May and June, and we are pleased to see GMS growth continue into the beginning of the third quarter," said Josh Silverman, Etsy, Inc. Chief Executive Officer. "

For this quarter, the company guided to revenue of $627.5M at the midpoint, below the consensus of $632.4M. GMV is seen at $3.025B, again below the Street of $3.07B.

Bernstein analyst Nikhil Devnani cut the rating on ETSY to Market Perform.

“We are late on this one. You live and you learn. We were hoping that Q3 GMS guidance and management commentary could draw a line in the sand on the business returning to growth, but it wasn't quite as reassuring,” the analyst said.

Oppenheimer analyst Jason Helfstein cut the price target by $15 to $135 per share. Still, he remains Overweight-rated as headwinds are “slowly abating.”

By Senad Karaahmetovic

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