ETSY Earnings: ETSY Stock Delivers 4% Gain as it Eyes ‘Runway for Growth'

Business Insider

5 days ago

Shares in online marketplace Etsy (ETSY) rose over 4% today as it said its growing AI prowess had helped it create a 'runway for growth' and deliver forecast-beating revenues.
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Revenues Boost
The group said revenues for the period came in at $672.7 million, up 3.8% on the same period last year and beating expectations of $647.63 million. It was driven by the performance of on-site ads.
There had been concerns that tariff uncertainty and changes to 'de-minimis' rules might have hit the stock, but it appears to have weathered the storm.
Gross Merchandise Sales (GMS) fell 4.8% year-over-year to $2.8 billion. This was an improvement on the 6.5% drop in sales recorded in the first quarter.
Active buyers decreased 4.6% year-over-year to 87.3 million, but as can be seen below, the figure is still steady compared with previous years. The group reactivated 6.5 million buyers in the quarter, a 2.8% increase from the number of buyers reactivated in the prior year, and up 1.3% sequentially. During the quarter, Etsy acquired 4.8 million new buyers.
It also noted that GMS per active buyer on a trailing twelve-month basis was $120, showing signs of stabilization.
However, it reported a net income of $28.84 million, or $0.25 per share. That's down on the $53.01 million, or $0.41 per share it recorded in the same period last year. It also missed expectations of $0.49 per share.
AI Push
Etsy chief executive Josh Silverman said that the overall group performance had been helped by the use of artificial intelligence and machine learning in its Etsy App helping to build better, more personalized engagement with customers.
'We are encouraged by our second quarter performance, which reflects tangible progress in our key investment areas,' Silverman said. 'These efforts are designed to strengthen customer relationships on the Etsy marketplace, deepen buyer engagement, and reignite GMS growth. We're seeing early success in our efforts to build a more browsable shopping experience, particularly on our App, amplified by more personalized marketing and emergent AI technologies. We believe this is creating a significant runway for growth.'
Is ETSY a Good Stock to Buy Now?
On TipRanks, ETSY has a Hold consensus based on 7 Buy, 10 Hold and 4 Sell ratings. Its highest price target is $71. ETSY stock's consensus price target is $54.11, implying a 10.27% downside.