Etsy poised to report in-line Q2 earnings amid spending pressures, competition concerns
Published: 11:18 22 Jul 2024 EDT
Etsy Inc (NASDAQ:ETSY, ETR:3E2) faces persistent discretionary retail goods spending pressures and fierce competition from low-cost online rivals which limit its upside, analysts at Wedbush believe.
In a note ahead of the online marketplace’s second quarter earnings report due July 31, the analysts wrote that they remain ‘Neutral’ on the stock.
Wall Street analysts, on average, expect Esty to report earnings per share of $0.47 on revenue of $633.4 million for Q2.
Wedbush’s analysts wrote that Etsy traffic trends point to an in-line 2Q.
They noted Etsy’s recent moves to make a greater distinction between its unique products and those sold on platforms like Temu, Amazon, and Shein.
“After emphasizing gifting in its advertising earlier this year (including for the Superbowl), new marketing campaigns place sellers at the forefront on print ads like billboards, while a new TV spot draws a direct contrast with handmade goods and those made by a robot, urging people to 'keep commerce human'," they wrote.
The analysts look positively on these efforts but do not see them as a “silver bullet” to consumers’ continued preference for lower-cost alternatives in this weak macro environment, which they do not see materially improving until 2025.
“That, combined with fierce competition in performance marketing channels, leads us to reduce our 2H 2024 gross merchandise sales (GMS) estimates slightly below consensus,” they wrote.
Wedbush has a $65 price target on Etsy, which traded hands at $62 on Monday.
