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Etsy (ETSY) Q1 Earnings to Gain From Marketplace Strength

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Etsy, Inc. ETSY is slated to report first-quarter 2021 results on May 5.

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

Moreover, the platform, which has emerged as the cash cow of the company, is expected to have sustained its momentum in the first quarter on the back of facilities provided to merchantssuch as product and inventory management, processing of orders and payments, and building customer relationships.

In fourth-quarter 2020, Marketplace revenues were $473.6 million (76.7% of total revenues), which went up 149.7% 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 first-quarter performance is likely to be.

Etsy, Inc. Revenue (TTM)

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 expected to have aided the performance of the Marketplace platform inthe 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 been 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 in the first quarter.

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

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

Zacks Rank & Key Picks

The company currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are Qorvo QRVO, Microchip MCHP and Synaptics SYNA. All the stocks carry a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Microchip, Qorvo, and Synaptics is pegged at 15.47%, 13.99% and 10%, respectively.

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