Etsy's fourth-quarter earnings are good, and its stock price soars

According to CNBC, Etsy platform released its fourth-quarter results on Thursday , and the data showed better-than-expected performance . The company's stock climbed 18% in extended trading that day , and the stock price had already climbed 10% in regular trading . The stock market staged a rebound in the evening after the initial plunge due to the news of Russia's invasion of Ukraine.

Etsy said it had 96.3 million active buyers on its platform as of the fourth quarter, slightly higher than the 95.6 million analysts had expected.

Revenue growth slowed to 16% year over year in the quarter . Etsy's sales growth was 100% in 2020 but has slowed in recent quarters.

The digital retailer said it expects first-quarter revenue of $565 million to $590 million, while Wall Street expected revenue of $630 million. Gross merchandise sales for the quarter are expected to be between $3.2 billion and $3.4 billion, below the consensus estimate of $3.5 billion.

But investors seemed unmoved by the mediocre expectations, instead focusing on fourth-quarter earnings and sales performance.

Etsy Chief Financial Officer Rachel Glaser attributed the weak first-quarter GMS outlook to year-over-year comparisons, when the company saw an increase in orders related to the pandemic , as well as increased spending related to government stimulus measures.

E-commerce companies such as Etsy, Shopify, eBay and Wayfair have all seen a slight boost in revenue during the worst months of the coronavirus pandemic . Under lockdown, many consumers cut back on trips to stores to avoid spreading the virus and turned to online retailers for both essential and nonessential items.

Glaser said she believes Etsy, which operates an online marketplace known for handmade and personalized goods , will be able to continue to expand its business in the post- pandemic market .

"Even without the impact of the pandemic , our first quarter 2022 guidance reflects our expectation that we would maintain all of the earnings levels we achieved in 2021 , which also reflects our belief in the durability of the growth we have experienced over the past two years, " Grasse said. "In addition, assuming stable macroeconomic conditions, we currently expect lower year-over-year GMS growth in the first half of 2022 and higher GMS growth in the second half of the year given the more challenging first half of the year."

Etsy

Good profitability

Stock price surges