Earnings To Watch: Etsy (ETSY) Reports Q2 Results Tomorrow

Jabin Bastian /
2022/07/26 4:14 am EDT

Online marketplace Etsy (NASDAQ: ETSY) will be announcing earnings results tomorrow after market close. Here's what to expect.

Last quarter Etsy reported revenues of $579.2 million, up 5.19% year on year, in line with analyst expectations. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth. The company reported 95.1 million active buyers, up 4.9% year on year.

Is Etsy buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Etsy's revenue to grow 5.28% year on year to $556.8 million, slowing down from the 23.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.74 per share.

Etsy Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing eight downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 8.9%.

Looking at Etsy's peers in the consumer internet segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Twitter's revenues decreased 1.15% year on year, missing analyst estimates by 11.9% and Snap reported revenues up 13.1% year on year, missing analyst estimates by 2.03%. Twitter traded down 3.88% on the results, Snap was down 23.7%. Read our full analysis of Twitter's results here and Snap's results here.

The technology sell-off has been putting pressure on stocks since November and while some of the consumer internet stocks have fared somewhat better, they have not been spared, with share price declining 7.24% over the last month. Etsy is up 15.5% during the same time, and is heading into the earnings with analyst price target of $122.1, compared to share price of $93.18.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.