Etsy (NYSE:ETSY) Trading Down 7.1% After Earnings Miss

Key Points

• EPS miss: Etsy fell 7.1% intraday after reporting EPS of $0.60 versus the $0.62 consensus, even though revenue beat at $631.28M; shares traded around $64.68 with volume down roughly 83% from average.
• Operationally the company showed improvement — Q1 revenue rose 3.1% and Etsy reported its first buyer growth in two years while highlighting AI-driven product discovery, prompting some brokers to raise price targets (Needham $85, BTIG $78).
• Mixed outlook on profitability and sentiment: Etsy has a negative ROE (−24.94%), low net margin (5.65%) and a high PE (~48.7), the consensus rating is a Hold with an average target of $66.67, and notable insider selling (including 70,000 shares by Josh Silverman) adds caution.

Etsy Inc (NYSE:ETSY - Get Free Report)'s share price was down 7.1% on Thursday following a dissappointing earnings announcement. The company traded as low as $64.94 and last traded at $64.6770. Approximately 589,019 shares were traded during mid-day trading, a decline of 83% from the average daily volume of 3,471,031 shares. The stock had previously closed at $69.60.

The company reported $0.60 EPS for the quarter, missing analysts' consensus estimates of $0.62 by ($0.02). The company had revenue of $631.28 million for the quarter, compared to the consensus estimate of $622.39 million. Etsy had a negative return on equity of 24.94% and a net margin of 5.65%.Etsy's quarterly revenue was up 3.1% compared to the same quarter last year. During the same quarter in the previous year, the company earned ($0.49) earnings per share.

Etsy News Summary

Here are the key news stories impacting Etsy this week:

• Positive Sentiment: Q1 revenue beat estimates and Etsy reported improving marketplace trends: revenue was roughly $631.2M and management cited returning GMS growth and higher buyer activity. Online marketplace Etsy beats revenue estimates on steady demand
• Positive Sentiment: Etsy posted its first buyer growth in two years and is highlighting AI-driven product discovery to attract shoppers — a structural improvement if sustained. Etsy posts first buyer growth in two years amid AI push
• Positive Sentiment: Analysts raised targets and reiterated buy ratings after the results — Needham lifted its target to $85 and BTIG to $78, signaling increased upside expectations from brokers. Needham raises Etsy price target to $85 BTIG raises Etsy price target to $78
• Neutral Sentiment: Earnings call characterized the recovery as “cautiously upbeat” — management sees improvement but signaled prudence on pacing investment and growth assumptions. Earnings call signals cautious recovery
• Negative Sentiment: Profitability remains a concern: GAAP EPS was roughly $0.60 (slightly below some consensus reports), net margin stayed low and return on equity was negative — metrics that limit upside until margins improve. Etsy issues earnings results (MarketBeat)

Wall Street Analysts Forecast Growth

Several research analysts have recently issued reports on the company. Deutsche Bank Aktiengesellschaft increased their price target on Etsy from $74.00 to $75.00 and gave the stock a "hold" rating in a research note on Thursday. Zacks Research cut Etsy from a "strong-buy" rating to a "hold" rating in a research note on Monday, April 20th. Wells Fargo & Company decreased their price target on Etsy from $52.00 to $47.00 and set an "underweight" rating for the company in a research note on Friday, February 20th. Morgan Stanley set a $64.00 price target on Etsy in a research note on Wednesday. Finally, Weiss Ratings reaffirmed a "hold (c-)" rating on shares of Etsy in a research note on Monday, April 20th. One research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, nineteen have given a Hold rating and three have assigned a Sell rating to the company's stock. Based on data from MarketBeat, Etsy has an average rating of "Hold" and a consensus target price of $66.67.

Insider Activity at Etsy

In related news, Director Charles Andrew Ballard sold 1,790 shares of the firm's stock in a transaction dated Wednesday, March 4th. The stock was sold at an average price of $55.74, for a total transaction of $99,774.60. Following the completion of the transaction, the director owned 4,006 shares of the company's stock, valued at $223,294.44. This trade represents a 30.88% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, insider Josh Silverman sold 70,000 shares of the company's stock in a transaction on Tuesday, April 21st. The shares were sold at an average price of $65.00, for a total value of $4,550,000.00. Following the sale, the insider directly owned 130,694 shares of the company's stock, valued at approximately $8,495,110. This represents a 34.88% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 168,636 shares of company stock valued at $10,253,703 over the last 90 days. 2.80% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Etsy

Several hedge funds have recently modified their holdings of the stock. Smartleaf Asset Management LLC lifted its holdings in shares of Etsy by 10.0% during the second quarter. Smartleaf Asset Management LLC now owns 1,734 shares of the company's stock valued at $88,000 after purchasing an additional 158 shares during the last quarter. Alamea Verwaltungs GmbH lifted its holdings in shares of Etsy by 2.3% during the second quarter. Alamea Verwaltungs GmbH now owns 7,380 shares of the company's stock valued at $370,000 after purchasing an additional 169 shares during the last quarter. PNC Financial Services Group Inc. lifted its holdings in shares of Etsy by 2.4% during the fourth quarter. PNC Financial Services Group Inc. now owns 7,550 shares of the company's stock valued at $419,000 after purchasing an additional 180 shares during the last quarter. Blue Trust Inc. lifted its stake in Etsy by 19.3% in the 1st quarter. Blue Trust Inc. now owns 1,238 shares of the company's stock worth $62,000 after acquiring an additional 200 shares in the last quarter. Finally, GAMMA Investing LLC lifted its stake in Etsy by 6.6% in the 4th quarter. GAMMA Investing LLC now owns 3,333 shares of the company's stock worth $185,000 after acquiring an additional 205 shares in the last quarter. 99.53% of the stock is owned by hedge funds and other institutional investors.

Etsy Stock Down 7.9%

The stock has a 50 day moving average price of $55.16. The firm has a market capitalization of $6.08 billion, a PE ratio of 48.72, a PEG ratio of 9.90 and a beta of 1.77.

About Etsy

Etsy, Inc operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. Its primary marketplace is Etsy.com that connects artisans and entrepreneurs with various consumers. The company also offers Reverb, a musical instrument marketplace; Depop, a fashion resale marketplace; and Elo7, a Brazil-based marketplace for handmade and unique items. In addition, it offers various seller services, including Etsy Payments, a payment processing service; Etsy Ads, an advertising platform; and Shipping Labels, which allows sellers in the United States, Canada, the United Kingdom, Australia, and India to purchase discounted shipping labels.

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