Global Digital Marketplace Etsy (NASDAQ: ETSY) The stock sold dramatically worse than the benchmark index in 2022 The popular e-commerce platform was an epidemic winner as lockdowns introduced millions of new customers to the platform. Despite supply chain and logistical constraints, the company had a record of 2021, indicating that customers continued to use the platform as buyers or sellers when reopening the economy. The company’s focus is to persuade its 90 million active customers to increase market share in 2022 by making repeated visits to purchase. Although its Q4 2021 earnings estimate was blown away, its financial Q1 2022 top and bottom line guidelines were downgraded. This provides an advantageous pullback level for prudent investors seeking some exposure to Etsy shares.
Fiscal Q4 2021 earnings release
On February 24, 2022, Etsy released its financial quarter-quarter 2021 results for the quarter ended December 2022. The company reported earnings-per-share (EPS) earnings of $ 1.11, excluding non-recurring items. Revenue grew 16.2% year-on-year (YoY) $ 717.45 million vs. $ 685.45 million Consensus analysts estimate. The adjusted EBITDA margin was 31% vs. the previous guideline 26%. GMS grew 16.5% YoY to $ 4.20 billion from the previous guideline of $ 3.90 to $ 4.10 billion. Etsy CEO Josh Silverman commented, “During the holiday season, most of our vendors – one of which is business and avoids massive supply shortages or complex fulfillment processes – bring small-scale shopping benefits. Buyers love their experience with Etsy and are coming back for more.” . “
Etsy cut its Q1 revenue in 2022 from $ 565 million to $ 590 million, compared to $ 629.51 million. The adjusted EBITDA margin is approximately 26% and GMS expects 3.2 billion and 3.4 billion.
Conference Call Takeaways
CEO Silverman noted that while many retailers were battling supply chain disruptions, the company still managed to reach record levels of GMS in Q4 2021. The epidemic has for the first time introduced millions of subscribers to Etsy, who are coming back for more when it reopens. GME rose 29.6% YoY to $ 13.5 billion and rose 158% on a two-year basis. He noted that 2021 was not about to return to normal and that the company had increased its market share. Profits are not transient because the company is focused on bringing in new buyers and making existing buyers shop more often. Etsy reached a record high of 90 million active shoppers as new shoppers grew by 84% in 2021. He noted that 53% of all active buyers in 2020 made at least one purchase in 2021. About 37% of new buyers by 2020 made purchases in 2021. As a frequency, 49% of active buyers made two or more purchases in 2021 and the GMS record per active buyer was $ 136 on a 12-month basis. He explained that these metrics illustrate the success of cross-functional efforts that help drive efficiency and reliability that will drive the Etsy platform as an e-commerce destination for customers. The plan is to revisit and repurchase consumers throughout 2022. CEO Silverman touches on search and discovery for Etsy Marketplace, “Using XWalk, we’re narrowing down the semantic gap by relying less on list classification and more on buyer interest. Towards the end of the year, our XWalk engine was using 4 billion data points, a 50% increase since launching in the second quarter of last year. This means we can use up to 16 times more real-time data to capture semantics, which means we cover our inventory through XWalk compared to our previous search capabilities. With that in mind, CEO Silverman says the “big hairy bold goal” was to make Etsy “the starting point of your e-commerce journey.” He sees a $ 2 trillion TAM for the Etsy marketplace.
ETSY opportunistic pullback level
Using rifle charts in weekly and daily time frames provides an accurate near-time view of the price action landscape for ETSY stocks. Weekly Rifle Chart Makes a Reverse Puppy Break After Topping at 163.80 Fibonacci (Five) layer. Weekly 5-period is falling at $ 135.48 and 15-period MA is falling at $ 154.65. Weekly 200-period MA sits at $ 112.30. Weekly Stochastic attempted a mini-sin but was suspended under the 20-band which would either result in a mini-sin through the 20-band or cross-down from the 20-band rejection. The weekly market structure low (MSL) trigger sits at 121.37. The daily rifle chart is divided by the 5-period MA $ 134.52 with the 15-period MA at $ 135.64. Daily 50-period MA is reading at $ 140.68. Daily low Bollinger Bands (BBs) sit at $ 113.80. Wise investors can see the opportunistic pullback levels at the $ 121.37 weekly MSL trigger, $ 115.89, $ 113.12 fib, $ 107.44, $ 102.49, $ 95.08 fib, and $ 92.64 fib levels. Upside trajectories range from $ 154.88 Fib to $ 193.42 Fib level.