Raymond James Reiterates Outperform Rating on Etsy (ETSY)
Raymond James analyst Josh Beck reiterated an Outperform rating and $65.00 price target on Etsy (NASDAQ: ETSY).
The analyst comments "ETSY’s 4Q24 missed expectations with GMS -6.8% (RJe -4.1%/Street -3.6%) and revenue +1.2% (RJe +1.8%/Street +2.4%); EBITDA% margins beat at +140 bp to 29.4% (RJe 28.8%; Street 28.5%), led by GM% +390 bp (RJe +135 bp; Street +170 bp). ETSY cited pressure from discretionary spending, tough comparisons, a shorter holiday window, category mix, and competitive promotions. Results show that the company is still being challenged in finding stronger footing post-COVID, particularly for the core ETSY Marketplace where GMS declines worsened q/q to -8.6% (3Q -6.0%, 2Q -3.2%, 1Q -5.3%). Notably, Habitual Buyers were -9.5% (vs. -4.2% in 3Q). Consistent with recent quarters, improvement in marketplace monetization continued to support EBITDA% expansion despite lower GMS. Guidance for 1Q25 is below expectations with GMS planned to decline at a rate similar to 4Q (-6.8% vs. RJe -0.8%; Street -1.5%). EBITDA% guided ~25-26% (lower than consensus at midpoint: RJe 26.7%; Street 26.0%). On the 8:30 a.m. EST call, we look for incremental initiatives to acquire new customers, re-engage lapsed buyers (and Habitual), reignite larger categories, international, take rate levers, and margin opportunities."
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Shares of Etsy closed at $57.29 yesterday.