NEW YORK (TheStreet) -- Shares of Etsy (ETSY - Get Report) are surging 15.31% to $11.60 in early-afternoon trading on Monday after Citigroup initiated coverage of the stock with a "buy" rating and $14 price target this morning.
Citigroup thinks Etsy's Seller Services, which charges merchants for extras such as product promotion or expedited check-out will provide growth for the company.
"The core Etsy offering, simply listing an item for sale, is what attracts a seller to the platform, but Etsy's Seller Services offerings are additive and in some cases higher margin services which sellers can utilize in order to either make the handling of orders more efficient or that allow for effectively maintaining an online presence," the firm wrote.
Additionally, Citigroup expects Etsy to revise its revenue guidance for fiscal 2016 to more closely align to the firm's growth outlook.
The company is scheduled to report 2016 second quarter results after Tuesday's market close.
Etsy is expected to report earnings of 1 cent on revenues of $80.55 million. Last year, the company reported a loss of 7 cents per share on revenues of $61.37 million for the same quarter.
Etsy is a New York-based e-commerce website focused on handmade goods.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings team rates ETSY INC as a Sell with a ratings score of D+. This is driven by multiple weaknesses, which the team believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover.
You can view the full analysis from the report here: ETSYETSY data by YCharts