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Etsy (ETSY) to Report Q4 Earnings: What's in the Offing?

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Etsy, Inc. (ETSY - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 25.

For the fourth quarter, the company anticipates total revenues between $459 million and $513 million.The Zacks Consensus Estimate for the same is currently pegged at $514.7 million, indicating an improvement of 90.6% from the prior-year quarter’s reported figure.

Further, the Zacks Consensus Estimate for earnings stands at 59 cents per share, suggesting growth of 136% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters, and missed the same once. It has a trailing four-quarter earnings surprise of 23.52%, on average.

Etsy, Inc. Price and EPS Surprise

 

Etsy, Inc. Price and EPS Surprise

Etsy, Inc. price-eps-surprise | Etsy, Inc. Quote

Key Factors to Note

Strong efforts toward enhancing product offerings in order to deliver enhanced customer experience and solid execution of key growth initiatives— including search and discovery, customer liability, marketing, and seller tools and services— are expected to have benefited the company’s fourth-quarter performance.

Moreover, the impacts of its two-sided marketplace and expanding collection of unique items are expected to get reflected in the fourth-quarter results.

Further, the company’s search and discovery platform remained the key catalyst. Strengthening search capabilities and upgraded context-specific search ranking algorithms are anticipated to have delivered an enhanced shopping experience to customers in the quarter under review.

Additionally, the company’s improving mobile app is expected to have aided it in gaining traction across customers in the fourth quarter.

Growing momentum across Reverb, courtesy of improving demand from new and existing buyers, is expected to have driven growth in Etsy’s gross merchandise sales in the to-be-reported quarter.

The impacts of the company’s increasing investments, seller shipping promotions, performance marketing budget and strengthening customer services are also anticipated to get reflected in the fourth-quarter results.

Further, its robust Etsy ad program and strengthening tools designed for sellers are likely to have expanded the seller base on its platform in the to-be-reported quarter.

However, accelerating costs related to the shift to Offsite Ads and increasing marketing expenses are expected to have remained concerning. Further, intensifying e-commerce competition is likely to get reflected in Etsy’sfourth-quarter results.

What Our Model Says

Our proven model conclusively predicts an earnings beat for Etsy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Etsy has an Earnings ESP of +0.75% and a Zacks Rank #3.

Stocks to Consider

Here are some companies worth considering, which have the right combination of elements to beat on earnings this quarter:

Workday, Inc. (WDAY - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CrowdStrike Holdings Inc. (CRWD - Free Report) presently has an Earnings ESP of +23.94% and a Zacks Rank of 2.

Sapiens International Corporation (SPNS - Free Report) currently has an Earnings ESP of +1.96% and is a Zacks #3 Ranked stock.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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