Etsy (ETSY) Q3 Earnings to Gain From Marketplace Strength

Etsy, Inc. ETSY is slated to report third-quarter 2020 results on Oct 28.

The company’s Marketplace platform, which allows merchants to list and sell their unique and creative products belonging to categories like homewares and home furnishings, jewelry and personal accessories, apparel, craft supplies, paper and party supplies, and beauty and personal care, is likely to have aided its third-quarter performance.

Moreover, this platform, which has emerged as the cash cow of the company, is expected to have sustained its momentum during the coronavirus-hit third quarter on the back of facilities such as product and inventory management, processing of orders and payments, and building customer relationships that are provided to the merchants.

In second-quarter 2020, Marketplace revenues were $332.03 million (77.4% of total revenues), which went up 145.6% 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.

For the third quarter, the Zacks Consensus Estimate for Marketplace revenues is projected at $304 million, indicating an improvement of 115.6% from the year-ago quarter’s reported figure.

Click here to know how the company’s overall third-quarter performance is likely to be.

Etsy, Inc. Revenue (TTM)


Etsy, Inc. Revenue (TTM)

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

Factors at Play

Etsy’s initiative to deliver an enhanced shopping experience with the help of a personalized search experience is likely to have aided the performance of the Marketplace platform during the to-be-reported quarter.

Moreover, strengthening search capabilities and upgraded context-specific search ranking algorithms are anticipated to have continued aiding the platform’s momentum across buyers, which, in turn, is likely to have bolstered growth in the active buyer base of the company.

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

Further, the company’s efforts to deliver a connected experience across all devices and to enable seamless human interaction are likely to have bolstered customer engagement on the platform during the third quarter.

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

All these are expected to have contributed well to Etsy’s top-line growth in the third quarter.

Zacks Rank & Key Picks

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Qorvo QRVO, CDW Corporation CDW and Avnet AVT. All three stocks flaunt a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate of Avnet, CDW and Qorvo is pegged at 17.88%, 13.1% and 12.35%, respectively.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Avnet, Inc. (AVT): Free Stock Analysis Report
Etsy, Inc. (ETSY): Free Stock Analysis Report
Qorvo, Inc. (QRVO): Free Stock Analysis Report
CDW Corporation (CDW): Free Stock Analysis Report
To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.