'Gets Better As It Gets Bigger': Etsy (ETSY) Stock Surges 16% on Beat Across the Board, Analysts Bullish

February 25, 2022 6:44 AM EST
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Price: $121.88 +2.01%

Rating Summary:
    20 Buy, 13 Hold, 0 Sell

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    Up: 5 | Down: 13 | New: 17
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Shares of Etsy (NASDAQ: ETSY) are up more than 16% in premarket trading Friday after the company's Q4 financial results that beat analyst estimates.

Etsy posted Q4 EPS of $1.11, compared to the consensus estimates of 76c per share. Revenue came in at $717.1 million, up 16% YOY, and above the analyst consensus of $685.5 million.

Etsy reported gross merchandise sales of $4.2 billion in the fourth quarter, up 17% YOY and compared to the estimates of $4.06 billion.

Marketplace revenue generated $541.2 million, up 14% YOY, and topped the analyst expectations of $517.6 million. Services revenue stood at $175.9 million, up 22% YOY, and above the analyst expectations of $167 million.

The number of active sellers in the quarter totaled 7.52 million, up 72% YOY and below the expected 7.6 million. Active buyers in the quarter totaled 96.34 million, up 18% YOY and slightly below the analyst consensus of 98 million.

Adjusted EBITDA was reported at $218.8 million, up 14% YOY, and compared to the estimated $178.8 million. Adjusted EBITDA margin was 31%, compared to the expected 25.9%.

"Reflecting on 2021, it is fair to say that Etsy has retained much of the positive impact we've seen from the dramatic adoption of e-commerce following the start of the COVID-19 pandemic,” said Etsy CEO Josh Silverman.

Needham & Company analyst Anna Andreeva sees Etsy as “one of few names surviving the pandemic online bubble with initiatives to drive top line at core brand and the subs.”

KeyBanc analyst Edward Yruma is also positive on Etsy stock following robust results.

“ETSY’s strong 4Q underscores our framework outlined in our January 19 upgrade that greater purchase frequency is key to driving long-term growth. Core ETSY non-mask GMS was +15%, largely in line with our expectations. The increase in base take rate (from 5% to 6.5%, effective in April) will drive revenue growth and help ETSY fund investments. Guidance seems consistent with difficult comparisons, but we think stacked growth will remain some of the strongest in our coverage,” Yruma wrote in a memo to clients

By Senad Karaahmetovic | [email protected]

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