What To Expect From Etsy’s (ETSY) Q1 Earnings

Kayode Omotosho /
2022/05/03 7:01 am EDT

Online marketplace Etsy (NASDAQ: ETSY) will be reporting results tomorrow after the bell. Here's what to expect.

Last quarter Etsy reported revenues of $717.1 million, up 16.1% year on year, beating analyst revenue expectations by 4.62%. Despite the stock trading up on the results, it was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth. The company reported 90.1 million active buyers, up 10% 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 4.37% year on year to $574.7 million, slowing down from the 141% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.76 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 four 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 9.35%.

Looking at Etsy's peers in the consumer internet segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Snap delivered top-line growth of 38% year on year, missing analyst estimates by 0.57% and Roku reported revenues up 27.7% year on year, exceeding estimates by 2.1%. Snap traded up 8.2% on the results, Roku was up 4.9%. Read our full analysis of Snap's results here and Roku's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and consumer internet stocks have not been spared, with share price down on average 19.6% over the last month. Etsy is down 28.7% during the same time, and is heading into the earnings with analyst price target of $190.3, compared to share price of $97.

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.