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Will Marketplace Momentum Benefit Etsy's (ETSY) Q4 Earnings?

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

The company’s solid momentum across its Marketplace platform is likely to have aided its fourth-quarter performance.

Notably, the platform, which allows merchants to list and sell their unique and creative products belonging to various categories, has emerged as the cash cow of the company.

In third-quarter 2020, Marketplace revenues were $341.6 million (75.7% of total revenues), which went up 141.2% from the year-ago quarter.This was driven by strong momentum across buyers.

We expect the trend to have continued in the to-be-reported quarter on the back of Etsy’s deepening focus on the enhancement of the Marketplace platform.

Click here to know how the company’s overall fourth-quarter results are likely to be.

Etsy, Inc. Revenue (TTM)

 

Etsy, Inc. Revenue (TTM)

Etsy, Inc. revenue-ttm | Etsy, Inc. Quote

Factors at Play

Facilities such as product and inventory management, processing of orders and payments, and building customer relationships, which Etsy offers through its Marketplace platform, are expected to have continued driving its momentum among merchants in the fourth quarter.

Further,expanding global footprints and solid organic traffic base expansion efforts are expected to have remained tailwinds in the quarter under review.

Additionally, the company’s efforts to deliver a connected experience across all devices and enable seamless human interaction are likely to have bolstered customer engagement on the platform in the to-be-reported quarter.

Also, Etsy’s initiative to deliver an enhanced shopping experience with the help of a personalized search experience and strengthening search capabilities is likely to have bolstered growth in its active buyer base.

Apart from this, the integration with Etsy Payment to facilitate seamless online payment transaction for orders and free shipment services are expected to have strengthened the buyer base on the Marketplace platform in the to-be-reported quarter.

All the above-mentioned factors are expected to have contributed well to the company’s Marketplace revenues in the quarter to be reported.

This, in turn, is expected to have aided the performance of Etsy in the fourth quarter

Zacks Rank & Key Picks

Etsy currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are CrowdStrike Holdings Inc. (CRWD - Free Report) , Workday, Inc. (WDAY - Free Report) and Analog Devices, Inc. (ADI - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for CrowdStrike, Workday and Analog Devices are currently pegged at 25%, 25.36% and 12.25%, respectively.

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