Analysts Recommend ‘Buys’ for Etsy ahead of Its Q2 2018 Results

Rating synopsis

Etsy (ETSY) is scheduled to report its second-quarter earnings results on August 6. Prior to the earnings release, 56.0% of the nine analysts covering Etsy stock have recommended “buys” as of July 27.

Another 33% of analysts have recommended “holds” on the stock, and the remaining analysts have rated it as a “sell.” Analysts are bullish, as the company’s strategic efforts have yielded the desired results. 

Analysts Recommend ‘Buys’ for Etsy ahead of Its Q2 2018 Results

Etsy’s growth prospects look bright as consumer preferences shift toward online shopping. The company has been making its service more transparent by adding more accurate information on shipping dates and information on returns and exchanges. It’s also increasing its marketing spending to expand its customer base and simplifying the search process by deploying machine learning and AI technology along with human curation. It has collaborated with customer service software company Zendesk to set up an improved help center.

For the second quarter, analysts expect its revenue to rise 25% to $127.1 million. However, its adjusted EPS are expected to fall 60% to $0.04.

Over the past 30 days, only one price revision has been made on Etsy stock. On July 11, Morgan Stanley raised its price target on the stock to $36.00 from $23.00. Currently, analysts’ consensus target price for the company is $44.44, which reflects a 5.9% downside to its stock price on July 27.

Peers’ ratings

For eBay (EBAY), 60.0% of the 37 analysts covering the stock have provided “buy” recommendations, and 38% have provided “hold” recommendations. eBay’s mean target price is $44.82, which indicates a 32.6% upside to its price on July 27.

For Alibaba (BABA), 95.0% of the 44 analysts covering the stock have provided “buy” recommendations, and 5% have provided “hold” recommendations. Alibaba’s mean target price is $238.42, which indicates a 25.9% upside to its price on July 27.

For Wayfair (W), 52.0% of the 25 analysts covering the stock have provided “hold” recommendations, and 44% have provided “buy” recommendations. Wayfair’s mean target price is $101.52, which indicates a 12.1% downside to its price on July 27.