Shares of online marketplace Etsy (NASDAQ: ETSY) fell 8.62% in the afternoon session after the company reported first-quarter results that exceeded analysts' gross merchandise sales, revenue, and earnings per share (EPS) expectations. Buyer growth was also strong and above Consensus, with management seeing "positive trends in our first quarter 2023 buyer data, particularly the return to year-over-year growth in the Etsy marketplace's active buyer base". One negative is that free cash flow in the quarter missed. Additionally, gross merchandise sales guidance for next quarter was roughly in line while revenue guidance was below Consensus. Overall, it was a mixed quarter with management highlighting an uncertain macro.
What is the market telling us:
Etsy's shares are very volatile and over the last year have had 45 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was about 1 month ago, when the company gained 5.07% on the news that analyst Edward Yruma of Piper Sandler upgraded the stock's rating from Neutral (Hold) to Overweight (Buy) and raised the price target from $135 to $140.
Etsy is down 18.7% since the beginning of the year, and at $92.23 per share it is trading 37.8% below its 52-week high of $148.20 from February 2023. Investors who bought $1,000 worth of Etsy's shares 5 years ago would now be looking at an investment worth $3,020.
Is now the time to buy Etsy? Access our full analysis of the earnings results here, it's free.