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Etsy (ETSY) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Etsy, Inc. ETSY is scheduled to report third-quarter 2019 results on Oct 30.

The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive earnings surprise of 56.17%.

Which Way Are Q3 Estimates Treading?

For third-quarter 2019, the Zacks Consensus Estimate for sales is currently projected at $194.64 million.

Further, the Zacks Consensus Estimate for earnings is pegged at 12 cents.

Past-Quarter Performance

In the second quarter, Etsy delivered non-GAAP earnings of 14 cents per share, which came in line with the Zacks Consensus Estimate. The figure improved significantly from year-ago quarter’s earnings of 3 cents per share.

Net revenues of 181.1 million missed the Zacks Consensus Estimate of $183 million. However, the figure was up 36.8% from the year-ago quarter.

Let’s see how things are shaping up prior to this announcement.

Etsy, Inc. Price and EPS Surprise

 

Etsy, Inc. Price and EPS Surprise

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

Factors at Play

The company’s continued focus toward proper execution of its key growth initiatives — search and discovery, customer liability, marketing, seller tools and services, is anticipated to get reflected in the third-quarter results.

Further, Etsy’s strong efforts toward enhancing product offerings in order to deliver enhanced customer experience are expected to have contributed to the third-quarter top line.

Additionally, the company’s improving mobile app is expected to have aided it in gaining traction across customers in the third quarter.

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

Etsy’s free shipping program, which has been gaining traction in the market, is anticipated to have bolstered customer base during the quarter under review.

Further, Etsy’s strengthening tools designed for sellers are likely to have expanded sellers base on its platform in the third quarter.

Furthermore, solid momentum across Etsy Ads is likely to get reflected in the third-quarter results.

However, increasing cloud spending is likely to have negatively impacted the third-quarter results. Further, the company’s creative campaigns are expected to have impacted marketing expenses in the quarter under review.

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 -33.33% and a Zacks Rank #3.

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.

Advanced Energy Industries, Inc. AEIS has an Earnings ESP of +4.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Micro Devices, Inc. AMD has an Earnings ESP of +6.54% and a Zacks Rank #2.

GlaxoSmithKline plc GSK has an Earnings ESP of +3.03% and a Zacks Rank #2.

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