Why Etsy Is Hitting All-Time Highs

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When Etsy Inc. (NASDAQ: ETSY) released its fourth-quarter financial results after the markets closed on Monday, the firm posted $0.32 in earnings per share (EPS) and $200.03 million in revenue. This compares with consensus estimates from Thomson Reuters of $0.21 in EPS and $194.89 million in revenue, as well as last year’s $0.36 per share and $136.27 million.

The firm delivered strong holiday results. In particular, gross merchandise sales (GMS) from Thanksgiving through Cyber Monday, the five key shopping days, was up 30% compared to the same period last year, driven primarily by product launches, marketing and improved landing page experiences.

For the quarter, GMS totaled $1.25 billion, an increase of 22.3% from the same period last year. International GMS was 36% of overall GMS, and increased 32% year over year on a currency-neutral basis.

Active buyers grew 18.2% year over year in the fourth quarter, and trailing 12-month GMS per active buyer accelerated for the fifth consecutive quarter. Active sellers grew 9.4% year over year.

Looking ahead to the 2019 full year, Etsy expects to see GMS growing in the range of 17% to 20% with revenue between $4.6 billion and $4.7 billion. Consensus estimates call for $0.70 in EPS and $776.19 million in revenue for the full year.

Josh Silverman, Etsy CEO, commented:

By making Etsy a great destination for holiday shopping, we delivered strong fourth quarter results to end an excellent year. On a currency-neutral basis, 2018 gross merchandise sales grew 20.4% to $3.9 billion for the year, revenue was up 36.8% to $603.7 million for the year, and we improved our margins. We kept our focus on improving search and discovery, building trust in the marketplace, expanding our marketing channels, and investing in services that fuel our sellers’ success.

Shares of Etsy were last seen up about 15% at $67.79 on Tuesday, in a 52-week range of $20.63 to $68.91. The stock has a consensus price target of $59.15.

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