Source : investing, 31/10/2024, Thursday
Goldman Sachs Inc. on Thursday updated its assessment of Etsy shares (NASDAQ:ETSY), raising its target price for the online market stock to $47.00, up from the previous $45.00, while maintaining the stock’s selling rating. The company’s analysis followed Etsy’s third-quarter earnings report, which revealed a mix of performance indicators.
Etsy reported a 4% year-on-year decline in total merchandise sales (GMS) for the third quarter, with a sharper 6% decline in the GMS for the underlying market. The company’s guidance for the fourth quarter indicates a continued decline in GMS, projecting a low to medium single-digit decline year-on-year.
Despite these trends, Etsy’s third-quarter revenue beat expectations, achieving a record acquisition rate of 22.7%, supported by growth in both market and services revenues. .
The company’s profitability in the third quarter also exceeded expectations, boosted by improved cost control measures. Moreover, Depop, the company acquired by Etsy, showed strong operational momentum, with an acceleration in GMS in the third quarter and expectations of growth of more than 30% year-on-year in the fourth quarter.
Etsy’s commitment to shareholder value was also evident through its share buyback activities during the quarter and its board of directors’ announcement of a new $1 billion share buyback mandate.
Looking ahead, Goldman Sachs Inc. expects the GMS of the Etsy market to remain a critical metric for investors as they monitor the downtrend in the fourth quarter. The potential range of adjusted EBITDA results for 2025 is also expected to attract investor interest, taking into account the current pace of expenditure growth.
