Shares of Etsy (ETSY) were little changed in after-hours trading after the online marketplace reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $0.41, which missed analysts’ consensus estimate of $0.45 per share.
Sales increased by 3% year-over-year, with revenue hitting $647.8 million. This beat analysts’ expectations of $629.2 million despite a 2.1% decrease in consolidated gross merchandise sales (GMS) and a 3.2% drop in ETSY marketplace GMS. Revenue growth was mainly attributable to growth in payments and transaction fee revenue from Offsite Ads.
During the second quarter, ETSY returned over $150 million to shareholders, with buybacks making up the entire amount. The firm has regularly repurchased its shares in each of the most recent quarters (as demonstrated in the image below).
Looking forward, management now expects its GMS for the third quarter to decline in the low single-digit range on a year-over-year basis. In addition, adjusted EBITDA margins are expected to be approximately 27%.
Is Etsy a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on ETSY stock based on nine Buys, 12 Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 34% decline in its share price over the past year, the average ETSY price target of $68 per share implies almost 4% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
