The street expectation for revenue falls near the upper end of the projection range of $192 million to $196 million set by the management. The mid-point of this range suggests a 43% jump from the same period last year. Etsy has been consistent with topline growth of late – it grew 41% in Q3 and 30% in Q2.
The revenue growth has primarily been boosted by a hike in sales commission fees introduced by CEO Josh Silverman, who took charge in May 2017.
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However, growth in revenue might not necessarily translate to the bottom line in Q4, as the company is currently raising its marketing spend as well as investments as part of its cloud integration. In the last reported quarter, Etsy had surprised Wall Street by reporting EPS of 15 cents versus 9 cents projected.
On the other hand, thanks to an expanded seller base and an increasing number of active buyers, gross merchandise sales (GMS) is expected to be strong once again during the holiday quarter. GMS refers to the number of goods sold through the site and is seen as a key metric for Etsy.
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During the last reported quarter, Etsy had raised its outlook for full-year GMS to $3.87 billion to $3.9 billion, up 20% annually.
The New York-based firm is also conducting an investors’ day on March 7.
The stock has a 12-month average price target of $63, which is at a 17% upside from the last close. All four analysts covering the stock have given Buy ratings.