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Etsy (ETSY - Free Report) is scheduled to report its first-quarter 2024 results on May 1.

For the first quarter of 2024, the Zacks Consensus Estimate for revenues is pegged at $648.32 million, indicating an improvement of 1.2% from the prior-year quarter’s reported figure.

The consensus mark for earnings is pegged at 49 cents per share, suggesting a decline of 7.6% from the prior-year quarter’s actuals. This figure has remained unchanged over the past 30 days.

Etsy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but remained in line with the same on the other occasion, the earnings surprise being 35.87%, on average.

Etsy, Inc. Price and EPS Surprise

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

Key Factors to Note

Etsy’s first-quarter 2024 results are expected to have benefited from solid momentum across active sellers, driven by increased visibility for seller-funded promotions and growing investments to provide tools and insights for sustainable pricing strategies for sellers.

The Zacks Consensus Estimate for active sellers stands at 9.3 million, indicating growth of 17.2% from the year-ago reported figure.

The company’s growing efforts to enhance the shopping experience for buyers by improving reviews and recommendations, developing new category purchase pathways and experiences, designing new tools for buyer engagement, and featuring handcrafted high-quality listings at great value are likely to have driven the active buyer base in the quarter under review.

The Zacks Consensus Estimate for active buyers stands at 96.6 million, indicating growth of 1.1% year over year.

Strong momentum in Etsy ads is expected to have boosted Etsy Services revenues during the to-be-reported quarter.

The consensus estimate indicates Services revenues to grow 3.5% year over year to $179.39 million.

Strength in the company’s Reverb and Depop businesses, owing to its robust product and marketing strategies, is likely to have acted as a tailwind.

However, softness in consumer discretionary product spending due to macroeconomic uncertainties and ongoing geopolitical conflicts is expected to have negatively impacted gross merchandise sales (GMS) during the first quarter.

The consensus mark for GMS is pegged at $3.05 billion, indicating a decline of 1.8% from the reported figure in the prior-year quarter.

Sluggishness in the Home & Living category and a highly competitive retail environment are likely to have been headwinds for the company.

What Our Model Says

According to the Zacks model, 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.

Etsy has an Earnings ESP of -7.48% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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