By Senad Karaahmetovic
Shares of Etsy (NASDAQ:ETSY) are up more than 8% after the company reported Q2 EPS and revenue that topped estimates.
The e-commerce company reported Q2 EPS of 51c, compared to 68c in the year-ago period and above the consensus projection of 35c per share. Revenue came in at $585.1 million, up 11% YoY and topping the consensus estimates of $558 million.
The number of active sellers in the quarter stood at 7.4 million, up 41% YoY, but below the expected 8.1 million.
Etsy expects Q3 revenue to be in the range of $540 million to $575 million, while analysts were looking for $571.7 million. The company estimates gross merchandise sales in Q3 to be between $2.8 billion and $3 billion, compared to the analyst consensus of $3.08 billion. Etsy expects Q3 adjusted EBITDA margin of 26%, in line with the consensus estimates.
An Oppenheimer analyst said the results set the stage for higher full-year estimates. As a result, he raised the price target to $127 from $120.
“While slowing consumer spending is likely to cause 2H GMS to be down y/y, we are raising '22E EBITDA 7% on higher margins. Near-term initiatives include higher usage of ETSY pay, increased adoption of seller tools and ads and the launch of Buyer Purchase Protection,” the analyst wrote.
A UBS analyst described results as “better than feared".
“While we were not surprised to see the stock trend higher in the after-market, we were surprised by the magnitude of the move. We think fundamentals continue to worsen versus the last quarter, the macro outlook is worse, and while most of Etsy's GMS represents consumer discretionary spend, two of its larger categories are already declining by double digits in 2Q. As such, despite the volatility, we think it is tough to see how the stock outperforms peers NT,” he explained in a note.