Etsy Stock Etches Out Earnings Beat And Shares Soar


Etsy, Inc. (NASDAQ: ETSY)

On Tuesday November 6th, 2018, Etsy, the place to buy and sell crafts and craft-like products reported their third quarter earnings after the market closed for trading. Shares took off higher on the news- hitting a high of $45.97 before settling back down and closed at $45.70.

The regular trading session saw the shares close down 4.04% at $40.43. However, after the earnings came out and investors and traders reacted, shares rose $5.17 closing at $45.70 up 12.79%.

Net income came in at $19.9 million, or 15 cents a share, this compares with $25.8 million, or 21 cents a share, in the same period a year-ago . Revenue jumpde to $150.4 million from $106.4 million in the year-ago period.

Analyst had forecast earnings of 7 cents a share on revenue of $149.9 million. The company said they now expect revenue of $596 million to $600 million, while analysts expect $595.4 million for the year.

Company Comments

Josh Silverman, Etsy, Inc. Chief Executive Officer offered these comments to the media:

“Etsy’s growth accelerated again in Q3, on a currency neutral basis, and we achieved several key milestones,” said Josh Silverman, Etsy, Inc. Chief Executive Officer. “We put our new pricing structure to work by increasing investments in marketing and product initiatives to fuel growth. We also completed a major step in our migration to the Cloud, a key foundational investment as we scale for future growth.”

Rachel Glaser, Etsy, Inc. Chief Financial Officer had this to say:

“Third quarter GMS and revenue increased 20.4% and 41.3% respectively from the prior year, as our financial results demonstrate continued operational execution and business momentum,” said Rachel Glaser, Etsy, Inc. Chief Financial Officer. “We are focused on leverage and return on investment as we have increased our marketing spend in the back-half of 2018.”

The Charts

The above chart shows Etsy going back roughly one year from today. The shares have been in a nice uptrend, and with today’s earnings beat, it looks as though shares will continue their upward ascent.

Etsy stock chart

The above price chart shows two different time frames. The left side in black shows the 5-minute intraday trading session on Tuesday. The right side which is shaded slightly, shows the after-hours trading session. It is easy to see just after the earnings announcement came out, how the shares reacted – barreling higher, then settling down and closed near the highs.

It will be interesting to see how the shares react when they open for trading on Wednesday:  7.49% of the shares in the float have been sold short. These traders have to go back into the market and buy those shares at some point, and it usually takes an earnings beat and share rise like this to signal them to cover their shorts.

Company Profile

Etsy, Inc. operates, a commerce platform to make, sell, and buy goods online and offline primarily in the United States, United Kingdom, Canada, Australia, France, and Germany. It provides various seller services and tools that are designed to help entrepreneurs for starting, managing, and scaling their businesses.

The company offers approximately 50 million items across approximately 50 retail categories to buyers. It also provides various seller services, including Etsy payments, a payment processing service; promoted listings, an on-site advertising service that allows sellers to pay for prominent placement of their listings in search results; shipping labels, which allows sellers in the United States and Canada to purchase discounted shipping labels; and pattern, a service that allows sellers to build custom Websites, as well as offers seller tools and education resources to manage the administrative side of their businesses. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.-YahooFinance