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Etsy Stock Plunges Following What Analysts Call ‘Disappointing’ Guidance

Etsy stock plunges after the online arts-and-crafts marketplace provides lower third-quarter revenue forecasts that disappoint both investors and analysts.

Etsy  (ETSY) - Get Free Report stock plunged on Thursday after the online marketplace of curated artisan-made goods reported better-than-expected second-quarter earnings but provided a third-quarter revenue forecast that fell short of analysts’ estimates.

Etsy posted earnings and revenue that handily beat Wall Street estimates but said it now expects revenue of between $500 million and $525 million for the current quarter, below current consensus forecasts of $527.5 million.

That prompted a raft of negative reactions from Wall Street analysts, with Truist Securities analysts Naved Khan and Youssef Squali calling the company’s outlook “disappointing” and Roth Capital Partners cutting its rating on the stock.

Truist’s Khan and Squali cut their one-year price target on Etsy to $215 from $217, noting that while the outlook was “disappointing” it “masks strength in the core business,” adding that Etsy “should be able to sustain healthy growth as trends normalize” after the first quarter of 2022. The duo held their buy rating on the shares.

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Roth analysts Darren Aftahi and Dillon Heslin shared a harsher post-earnings review, downgrading the stock to neutral from buy and cutting their price target to $180 from $245. 

“It is hard to see how growth can re-accelerate from here without another macro tailwind amid tough comps” for the next two to three quarters, they wrote.

Jefferies analysts John Colantuoni and Brent Thill were the most optimistic, holding their buy rating and noting that despite the lower guidance, the “bullish long-term story remains intact,” and that the guidance itself “could prove conservative” given challenges expected in the third quarter were already present in the second quarter.

At last check, shares of Etsy were down 9.14% at $183.62. The stock is up 17.45% year to date and more than 49% over the past 12 months.