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Etsy Hits 52-Week High on Solid Customer Base, Cost Efforts

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Shares of Etsy Inc. (ETSY - Free Report) touched a 52-week high of $19.09, eventually closing a bit lower at $18.96 on Dec 8. The stock has gained 61% year to date, substantially outperforming the 24.3% rally of the industry it belongs to.
 
The outperformance can be attributed to the company’s efforts to attract new market participants by improving website features and enhancing platform infrastructure. These are anticipated to make the shopping experience even better for users this holiday season.

Growing Customer Base

In third-quarter 2017, Etsy’s active sellers totaled 1.2 million, up 10.8% year over year, while active buyers were 32 million, up 16.7% from the year-ago quarter.

Growth in both active buyers and sellers suggests that the marketplace is growing at a healthy rate and the trend is expected to continue.

Etsy, Inc. Price and Consensus

 

Etsy, Inc. Price and Consensus | Etsy, Inc. Quote

New Tools

Etsy has been working on various tools to improve experience of users. New features like structured return policy, best seller badge, enhanced search & discovery and Context Specific Search Ranking (CSR) were introduced last quarter.

Etsy also plans to introduce some enhancements in 2018. Moreover, it is also working on improving existing infrastructure. It took an initiative to migrate data centers to the cloud, which will accelerate search results and machine learning capabilities, which in turn will improve user experience.

Cost Reduction

Etsy is now focused on doing fewer things better. Through a combination of headcount reductions, reductions in internal program expenses and exit from non-performing areas, the company is expected to achieve significant cost savings.

To-date, Etsy has identified approximately $20 million in 2017 expense reductions, which are expected to result in approximately $35 million in annualized cost savings.

Zacks Rank & Stocks to Consider

Etsy has a Zacks Rank #3 (Hold).

Intel Corporation (INTC - Free Report) , IPG Photonics Corporation (IPGP - Free Report) and NVIDIA Corporation (NVDA - Free Report) are some of the better-ranked stocks in the broader technology sector. All of them sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Intel, IPG Photonics and NVIDIA is projected to be 8.42%, 19.67% and 10.25%, respectively.

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