Etsy (ETSY) to Report Q2 Earnings: What's in the Cards?

Etsy, Inc. ETSY is scheduled to report second-quarter 2020 results on Aug 5.

The Zacks Consensus Estimate for second-quarter sales is currently pegged at $334.4 million, indicating an improvement of 84.6% from the prior-year quarter.

Further, the Zacks Consensus Estimate for earnings stands at 44 cents per share, suggesting growth of 214.3% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in one of the trailing four quarters, matched twice and missed once. The company has a trailing four-quarter earnings surprise of 0.66%, on average.

Etsy, Inc. Price and EPS Surprise

Etsy, Inc. Price and EPS Surprise

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

Factors to Note

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

Moreover, the company’s two-sided marketplace and expanding collection of unique items are likely to get reflected in the second-quarter results.

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

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 have driven growth in Etsy’s gross merchandise sales (GMS) in the to-be-reported quarter.

Etsy’s increasing strategic investments, seller shipping promotions, performance marketing budget and strengthening customer services are also anticipated to get reflected in the fourth-quarter performance.

Further, the company’s strengthening tools designed for sellers are likely to have expanded seller base on its platform during the to-be-reported quarter.

However, increasing cloud spending is likely to have weighed on the second-quarter performance. Further, uncertainties related to coronavirus pandemic are likely to get reflected in the to-be-reported quarter’s results.

What Our Model Says

Our proven model doesn’t conclusively predict 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 -4.36% and a Zacks Rank #2.

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Cogent Communications Holdings CCOI has an Earnings ESP of +11.66% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics SYNA has an Earnings ESP of +10.6 % and currently carries a Zacks Rank of 2.

Benefitfocus BNFT has an Earnings ESP of +6.25% and carries a Zacks Rank of 2, currently.

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

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