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Against a backdrop of humble financial growth globally, Etsy rides solid Q4 earnigs
Slowing company growth is one thing, but having to deal with internal sluggishness against a global backdrop of economic slowdown only makes things worse.
Luckily for Etsy, their fortune seems to be turning around on both counts, with more positive revenue numbers and a hesitantly growing financial market.
The global markets showed slight gains this week, with the Dow Jones Industrial Average up 1.9 percent this week (to 16,700) but still down 4.2 percent for the year and the Nasdaq up 2.0 percent this week (to 4,598) but down 8.2 percent for the year.
Still struggling, Twitter is down 1.9 percent for the week to $18.00 and it’s down 22.3 percent for the year. Facebook, one tech company that has performed fairly well in spite of market turmoil, is up 3.2 percent this week to $107.87 and up 3.1 percent for the year.
Apple is up 2.5 percent to $96.92 this week, and for the year it’s down 7.8 percent. Alphabet (Google) is up 0.4 percent to $725.08, and for the year it’s down 6.8 percent.
Financial meltdown or not, Etsy has had a rough year regardless. In the past ten months since the company hit the Nasdaq, Etsy shares have gone straight down and to the right. Shares for the company closed at $30 on IPO day, a huge 88 percent pop from the company's initial pricing for its stock. But then it was downhill ever since:
The company might be turning things around though.
Last quarter, Etsy's revenues grew 35.4 percent year-over-year, from $64.9 million in Q4 2014 to $87.9 million in Q4 2015. The company has been able to boost both the number of active sellers by 15.5 percent to 1.6 million and the number of active buyers by 21.4 percent to 24.0 million.
All this in spite of new, notable competition from Amazon Handmade, a marketplace for "unique, handcrafted goods" taking particular aim at Etsy by leveraging Amazon's existing brand and network of customers. Nevertheless, Etsy appears to be handling the competition well by leveraging its existing brand and building out an improved mobile offering.
The day after its earnings report, Etsy opened up Wednesday with a share price at the $8.30 mark, a level the company hadn’t reached since the beginning of the year.
Though the company still has a long way to go before it can return its share price to IPO levels, signs indicate they may be on their way. Though Morgan Stanley and Wedbush both reiterated a "hold" rating for the company, Zacks Investment Research upgraded Etsy to a "buy" rating.
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