Latest news with #JoshSilverman
Yahoo
3 days ago
- Business
- Yahoo
ETSY Stock Stages 35% Resurgence With Higher Highs Expected
Etsy's (ETSY) stock has been on a wild ride—skyrocketing during the pandemic before plunging in the years that followed as growth stalled. In that time, sales plateaued, buyer numbers fell, and the business struggled to rediscover its momentum. But beneath the surface, Etsy has quietly transformed into a cash flow machine, generating $685 million in free cash flow over the past 12 months. Combine that with aggressive share buybacks and a hefty 22% short interest—a potential powder keg—and its 35% rally from April lows could be just the beginning of a much larger move. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter At first glance, Etsy's investment case doesn't look particularly compelling. Its latest earnings report paints the picture of a company spinning its wheels. Consolidated gross merchandise sales (GMS) dropped 6.5% year-over-year to $2.8 billion, with the core Etsy Marketplace faring even worse, down 8.9%. On the earnings call, CEO Josh Silverman attributed the weakness to a 'challenging environment,' where cost-conscious consumers are prioritizing essentials over Etsy's unique assortment of handcrafted goods. A newly introduced $29 seller fee, aimed at weeding out lower-quality shops, also led to a trimmed seller base, hardly a catalyst for growth. Meanwhile, shopper engagement is waning. GMS per buyer declined 3.5% to $120, suggesting users aren't sticking around or spending like they used to. It's not that Etsy has lost its appeal—its mobile app now accounts for a record 44.5% of Marketplace GMS—but macroeconomic pressures like inflation and global uncertainty are putting a damper on discretionary spending. Etsy is pushing back with AI-powered personalization to enhance the browsing experience, but for now, that effort feels more like a flicker than a flame. Other e-commerce players such as Wayfair (W) and eBay (EBAY) are navigating similar headwinds, but Etsy's niche focus raises the stakes. Without a breakout product category or a surge in new buyers, Etsy remains on the defensive, leaning heavily on its loyal community of artisans and vintage sellers to carry it through. The big question is whether that's enough to shift the momentum. Etsy isn't just grappling with a tough macro environment—it's also struggling to keep its core metrics from sliding further. The company is leaning heavily into technology, introducing a new 'Discovery Centric Shopping' experience that has nearly doubled engagement on personalized homepages. While promising, these initiatives are still in their infancy, and whether they'll meaningfully move the needle remains uncertain. The recent $105 million sale of Reverb, Etsy's musical instrument marketplace, served as another wake-up call. Though the move helped streamline operations, it came with a steep price: a $102 million non-cash impairment charge that contributed to a painful Q1 EPS miss of -$0.49—well below the $0.47 analysts had expected. The retreat from diversification likely didn't sit well with investors either. Etsy is now fully committed to its core marketplace, but unloading assets like Reverb can feel more like retrenchment than progress. Meanwhile, competitive pressure continues to mount. Goliaths like Amazon (AMZN) and Walmart (WMT), with their vast product ranges and competitive pricing, are encroaching on Etsy's artisanal niche. Etsy's take rate, which climbed to 23.3% in Q1, is healthy on paper—but without a rebound in buyer demand, it's more of a cosmetic win. The company is betting on AI and machine learning to deepen shopper engagement, but with consumers tightening their belts, Etsy's growth engine is sputtering. But here's the plot twist. Despite the growth slump, Etsy has turned into a free cash flow machine. Over the trailing 12 months, the company generated $685 million in FCF, converting an eye-popping 87% of its adjusted EBITDA. In Q1 2025, it pulled in $35 million despite seasonal cash outflows. This wasn't achieved by chance. Etsy's capital-light model, connecting buyers and sellers without the burden of inventory, keeps the cash flowing. CFO Lanny Baker, on the earnings call, called it a 'strong financial foundation,' with Etst also having nearly $1 billion in cash on hand. At this stage, management is not pursuing moonshot acquisitions or risky expansions. Instead, it has honed its mature business to run lean and mean, while returning all of its free cash flow back to shareholders in the form of share buybacks. In particular, with growth on hold, Etsy is doubling down on returning cash to shareholders. Over the past 12 months, it has plowed $820 million into stock buybacks, which, for context, accounts for over 13% of today's market cap, even after the 35% rally over the past month. In Q1 alone, $189 million was spent on buying back shares, a clear signal that management believes the stock is undervalued at current prices. Now factor in the 22% short interest, and you've got the makings of a high-stakes setup. The recent surge in Etsy's share price has put pressure on bearish positions, and if the company continues generating strong cash flow while aggressively reducing its share count, those short bets could unwind quickly, setting the stage for a potential short squeeze. With momentum already building, this rally might just be getting started. Wall Street remains relatively skeptical about Etsy's prospects. ETSY stock features a Hold consensus rating, with eight analysts currently bullish, 13 neutral, and four bearish. ETSY's average stock price target of $48.17 indicates ~22% downside potential over the coming twelve months. Etsy presents a bit of a paradox. It's a company facing sluggish growth, yet it's churning out solid cash flow and buying back shares at an aggressive pace. That 35% rally over the past month isn't just market noise—it's underpinned by strong free cash flow and buybacks that signal real confidence in the stock's intrinsic value. With 22% of the float sold short, the conditions for a short squeeze are hard to ignore. Growth may be elusive for now, but Etsy's financial strength and strategic capital returns could continue to drive the stock higher, making it a name worth watching closely. Disclaimer & DisclosureReport an Issue
Yahoo
30-05-2025
- Business
- Yahoo
Etsy's CEO shares two key steps he took early in his career that set him up for later success
As Gen Z grads struggle with an uncertain job market, Etsy CEO Josh Silverman shares how he just threw himself into any job early on in his career—not knowing if he would stick with it forever—to get the ball rolling. Once he was in it, he soaked up as many lessons as possible, and took on work no one else wanted. It's the same type of grit Mark Cuban and Steve Jobs embraced to achieve success. The class of 2025 is stepping into an uncertain job market, unsure of where to start on the winding path to success. Etsy CEO Josh Silverman told the next cohort of workers that two steps he made in his early career set him up for triumph down the line: picking something he enjoyed, and going above and beyond in his junior-level role. 'For me, the most important thing has always been to start by throwing myself in with zealous passion to something that I liked enough and I was good enough at,' Silverman told Pace University graduates during his commencement speech on May 19. Like many others navigating their careers in their 20's, the $8 billion handcraft goods executive didn't know exactly what he wanted in college. Silverman hopped industries and jobs throughout his career, but having the determination to get the ball rolling was essential to figuring it out. He noted that delving into the work, and soaking up all the knowledge he could, also opened new doors that led him to executive success. And it's a career journey many people can relate with, especially given how chaotic and uncertain life feels in one's early 20s. 'Life shouldn't be full of adventure—it should be an adventure, and don't let that scare you. Embrace it,' Silverman said. Silverman first enrolled as a theater student at Brown University in the 1980s, but recounted not being able to score any opportunities as a young undergrad. So he switched his concentration to public policy, knowing he enjoyed it and had the skills to make it into a career. 'Was I convinced that I wanted to spend the rest of my life as a health care policy analyst? Maybe,' Silverman said during the speech. 'But I knew it was a way to get started and the best way to figure it out was to throw myself into it wholeheartedly.' That was the Etsy CEO's first learning lesson—pick an interesting job where you have relevant skills, and go all-in. The next came shortly after; upon graduating from Brown University, Silverman got his first job answering phone calls for U.S. Senator Bill Bradley. He went above and beyond his regular responsibilities, picking up other duties no one else wanted and bonding with his co-workers. '[I] was an absolute sponge in meetings. [I hung] out by the water cooler, determined not to miss the most interesting conversations,' Silverrman said. 'Then life opened a totally unexpected door.' Silverman's diligence and enthusiasm paid off; three years later, he was invited to join a consulting practice launched by Bradley's chief of staff. This was his first foray into private business, which feels far away from his later years spent co-founding Evite, becoming CEO of Skype, leading consumer products at American Express, and rising to chief executive of Etsy in 2017. Without his early career choices, Silverman may not have the stellar resume he holds today. There are many entrepreneurs and business leaders who drive home the importance of being scrappy when they're young. Like Silverman, Shark Tank mogul Mark Cuban is a huge proponent of 'sweat equity'—working hard will help drive you to the finish line, even if it means picking up more responsibilities outside of your nine-to-five. 'Work like there is someone working 24 hours a day to take it all away from you,' Cuban said. The late Apple legend, co-founder, and CEO Steve Jobs echoed the same sentiment. Jobs was just 21 years old when he launched the $3.2 trillion technology business with his partner, Steve Woznaik. As a college dropout, Jobs threw himself into the industry working at video game company Atari before becoming an entrepreneur. Even at the age of 13 he knew his calling, working as a computer technician at Hewlett-Packard. Those early years were a total grind—but set Jobs to be a pioneer in his space. 'I'm convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance,' Jobs once said. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
ETSY Q1 Earnings Call: Revenue Beats Estimates, Margins and Buyer Growth Remain Under Pressure
Online marketplace Etsy (NASDAQ:ETSY) reported Q1 CY2025 results beating Wall Street's revenue expectations , but sales were flat year on year at $651.2 million. Its non-GAAP profit of $0.83 per share was 18.3% below analysts' consensus estimates. Is now the time to buy ETSY? Find out in our full research report (it's free). Revenue: $651.2 million vs analyst estimates of $642 million (flat year on year, 1.4% beat) Adjusted EPS: $0.83 vs analyst expectations of $1.01 (18.3% miss) Adjusted EBITDA: $171.1 million vs analyst estimates of $164.2 million (26.3% margin, 4.2% beat) Operating Margin: -3.4%, down from 10.5% in the same quarter last year Free Cash Flow Margin: 5.4%, down from 35.7% in the previous quarter Active Buyers: 94.78 million, down 1.61 million year on year Market Capitalization: $4.88 billion Etsy's first quarter results for 2025 reflected the company's ongoing navigation through a complex consumer and macroeconomic environment. Management highlighted continued investments in product innovation, notably around artificial intelligence-driven personalization and improvements to the mobile app experience. CEO Josh Silverman pointed to the app's growing share of total marketplace sales and described recent product launches—such as curated, browsable shopping experiences—as early steps toward reigniting buyer engagement. Looking ahead, leadership expressed cautious optimism that stacking these product and marketing initiatives will gradually improve growth as the year progresses. However, management acknowledged that ongoing macroeconomic challenges and tariff uncertainties could weigh on consumer discretionary spending. CFO Lanny Baker noted that while marketing investments are increasing, especially in paid social channels, expected margin pressures will persist, and buyer frequency remains a key focus area for improvement. Etsy's leadership detailed several operational and strategic developments that shaped Q1 performance. Management attributed the quarter's outcomes to a mix of product innovation, evolving marketing strategies, and targeted marketplace adjustments: AI-powered personalization emphasis: The company continued rolling out advanced artificial intelligence (AI) and machine learning features to deliver more tailored shopping experiences. CEO Josh Silverman stated that new 'algatorial curation'—a combination of algorithmic and editorial input—has made the site more browsable and is expected to drive higher customer engagement. Mobile app momentum: The mobile app reached a record 44.5% of total gross merchandise sales (GMS), with year-over-year increases in monthly active users and first-time downloads. Management views the app as a core driver of future growth, as it gathers richer customer data and enables more effective personalization. Seller base quality improvements: Etsy introduced a $29 shop setup fee in the U.S. to encourage serious sellers, resulting in higher seller retention and a greater share of new sellers making sales. Silverman emphasized that this was an intentional move to improve overall marketplace health, not a response to declining demand. Marketing channel shift: Marketing spend shifted further toward paid social media, with a focus on performance and mid-funnel initiatives. The company reported meaningful gains in efficiency and engagement from these channels, even as returns lag those from search advertising. Tariff and trade lane resilience: Management addressed the fluid global tariff landscape, noting Etsy's relatively limited direct exposure to U.S.-China imports. The majority of marketplace sales are local transactions, which could position Etsy favorably if tariffs disrupt global supply chains. Leadership established a task force to monitor and respond to evolving regulatory risks. Management's outlook for the coming quarters centers on the gradual compounding of recent product, marketing, and operational investments, with external macroeconomic and regulatory factors remaining significant variables. Product innovation stacking: Leadership believes that continued rollouts of AI-driven personalization, improved app features, and enhanced discovery experiences will collectively drive higher buyer engagement and frequency over time. Buyer reactivation focus: Reactivating lapsed buyers and increasing purchase frequency are top priorities. The company is testing new loyalty initiatives and personalized marketing strategies, with early signs that these efforts can boost long-term customer value. External headwinds: Management cited ongoing macroeconomic uncertainty and potential tariff changes as key risks. They acknowledged that higher tariffs on competitors could improve Etsy's relative value proposition, but broader consumer spending softness remains a concern. Shweta Khajuria (Wolfe Research): Asked about the path to improved growth and the impact of increased marketing spend in social channels. Management stated progress in social marketing performance and buyer reactivation but reiterated that macroeconomic conditions remain a challenge. Bryan Smilek (JPMorgan): Inquired about the future roadmap for the mobile app and its potential to drive higher gross merchandise sales. CEO Josh Silverman described ongoing efforts to make the app experience more personalized and browsable, aiming to position it as a primary shopping channel. Nikhil Devnani (Bernstein): Questioned whether the decline in active sellers is affecting buyer metrics and marketplace network effects. Silverman replied that intentional friction from the new seller fee has improved seller quality, not contributed to buyer declines, attributing lower buyer numbers mainly to macro factors. Michael Morton (MoffettNathanson): Asked about the impact of increased cloud and shipping costs on gross margin. CFO Lanny Baker explained that higher machine learning and loyalty program costs were expected and are part of ongoing investments in customer experience. Ygal Arounian (Citi): Sought clarity on the implications of changes to de minimis tariff exemptions and the potential impact of AI-powered shopping agents. Silverman indicated Etsy's limited exposure to direct China imports and discussed opportunities for Etsy's differentiated inventory in a world shaped by agentic shopping. Looking forward, the StockStory team will be tracking (1) the effectiveness of AI-driven personalization and app-based engagement in reversing buyer and GMS declines, (2) the pace at which new loyalty and retention initiatives impact purchase frequency, and (3) Etsy's ability to navigate potential changes in global tariffs and trade regulations. The successful execution of ongoing marketing channel shifts and the company's response to external consumer headwinds will also be critical signposts for Etsy's near-term trajectory. Etsy currently trades at a forward EV/EBITDA ratio of 6.6×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
13-05-2025
- Business
- Yahoo
Down 84%, Is It Time to Buy This Bargain Stock Like There's No Tomorrow?
During Q1, Etsy's online marketplace exceeded Wall Street's revenue estimates. However, the e-commerce company's key metrics are trending in the wrong direction. Thanks to a falling stock price, its forward P/E multiple is now less than half the S&P 500's. 10 stocks we like better than Etsy › Since early April, the market has started to recoup its 2025 losses. But even though it's still below its record high, investors might struggle to find attractive buying opportunities. Luckily, there's one company that's on the discount rack. As of this writing, this e-commerce stock trades a gut-wrenching 84% below the peak it touched in November 2021. Should investors scoop up these shares like there's no tomorrow? For the first quarter, Etsy (NASDAQ: ETSY) exceeded Wall Street's estimates on the top line. The specialty online marketplace, where third-party sellers list vintage, unique, and handcrafted goods, posted revenue of $651.2 million, a 0.8% year-over-year increase. That might have taken attention away from the fact that its adjusted earnings per share missed analysts' estimates. There are other favorable attributes that might make Etsy a worthy investment candidate. For starters, the platform is differentiated in the merchandise that it offers. A survey conducted by the business in 2023 revealed that 83% of buyers on the site say it has items that they can't find anywhere else. This helps Etsy stand out in a crowded retail field. Etsy also benefits from the network effect. As more third-party sellers post their goods for sale, Etsy becomes more valuable to shoppers looking for a broad selection. And as more buyers flock to the site, sellers can target a larger potential customer base. The uncertainty around President Donald Trump's tariffs is worrying investors and executive teams at companies of all stripes. But on Etsy's Q4 earnings call in February, CEO Josh Silverman noted that his company is "vastly less" dependent on goods coming from China than most of its peers. And the focus remains on better serving the user base. In the Q1 earnings press release, management noted: "To address the evolving tariff landscape, we established a small operational task force focused on delivering creative solutions for the Etsy marketplace community." It's clear that Etsy has some positive traits to hang its hat on. However, investors have lost some confidence in its model. Though it did beat expectations last quarter, the company's financial performance left much to be desired. Gross merchandise sales fell 6.5% year over year as less activity occurred on the platform. The leadership team thinks this key performance metric will drop again in the current quarter. Etsy's user base continues to shrink. The number of active sellers declined 11.3% year over year in Q1, while active buyers dipped 1.7%. For sellers, the problem might be that Etsy's take rate (its revenue as a percentage of gross merchandise sales) has trended higher over time without greater sales volume. For buyers, the challenge remains to drive repeat purchase behavior. Falling sales and a shrinking user base are undoubtedly troubling signals. They're also clear signs that Etsy's business has become more cyclical. This wasn't the case throughout most of its history. And during the COVID-19 pandemic, it saw tremendous success. However, since peaking in 2021, gross merchandise sales have fallen in every subsequent year. Now, the uncertain macroeconomic backdrop is creating another major headwind for consumers, leading them to scale back on discretionary purchases. Etsy's shares have been beaten down so far that their valuation now is hard to overlook. As of this writing, the stock trades at a forward price-to-earnings ratio of 9.8. That's less than half the multiple of the broad S&P 500 index. The shares are in bargain-basement territory. In my opinion, though, investors should be patient and wait to buy them until Etsy gets back to reporting consistent gross merchandise sales growth, and its base of buyers and sellers starts to expand again. Those would be clear indications that things are heading in the right direction. Before you buy stock in Etsy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Etsy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $598,613!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $753,878!* Now, it's worth noting Stock Advisor's total average return is 922% — a market-crushing outperformance compared to 169% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Etsy. The Motley Fool has a disclosure policy. Down 84%, Is It Time to Buy This Bargain Stock Like There's No Tomorrow? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-04-2025
- Business
- Yahoo
Etsy, Inc. Reports First Quarter 2025 Results
BROOKLYN, N.Y., April 30, 2025 /PRNewswire/ -- Etsy, Inc. (NASDAQ: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced results for its first quarter ended March 31, 2025. "Etsy's first quarter 2025 financial results were aligned with our expectations, with solid adjusted EBITDA performance despite pressure on the top line," said Josh Silverman, Etsy Inc. Chief Executive Officer. "We're excited to see green shoots, particularly in our App metrics, indicating that our work to build deeper connections with buyers and encourage more frequent visits is taking hold. By leveraging the power of artificial intelligence and machine learning, we're creating a more inspiring and engaging app experience that provides us with richer insights to personalize Etsy in meaningful ways for each buyer. We believe our seasoned team is ready to drive the next phase of Etsy's growth and success, and that our resilient two-sided marketplace business model can help us weather macroeconomic volatility." First quarter 2025 performance highlights include: Consolidated GMS was $2.8 billion, down 6.5% year-over-year and down 5.7% on a currency-neutral basis. Etsy marketplace GMS was $2.3 billion, down 8.9% year-over-year and down 8.1% on a currency-neutral basis. Active buyers decreased 3.4% year-over-year to 88.5 million. We reactivated 6.5 million buyers, up 2.1% from the prior year period, and acquired 4.8 million new buyers. GMS per active buyer on a trailing twelve month basis for the Etsy marketplace declined 3.5% year-over-year to $120. The number of habitual buyers was 6.2 million, down 11.0% year-over-year. Depop continued to see strong top line growth, particularly in the United States; first quarter GMS was the highest it has been since the business was acquired in 2021. Consolidated revenue was $651.2 million, up 0.8% versus the first quarter of 2024, with a take rate (i.e., consolidated revenue divided by consolidated GMS) of 23.3%. Our positive revenue growth was driven primarily by significant growth in on-site advertising revenue for both Etsy and Depop, a full quarter impact of the seller set-up fee, and continued benefit from Payments expansion. Consolidated net loss was $52.1 million, down $115.1 million year-over-year, reflecting an impairment charge of $101.7 million to the goodwill of Reverb. Consolidated net loss margin (i.e., net loss divided by revenue) was approximately (8.0)% and diluted net loss per share was $(0.49). Consolidated non-GAAP Adjusted EBITDA was $171.1 million, with consolidated non-GAAP Adjusted EBITDA margin (i.e., consolidated non-GAAP Adjusted EBITDA divided by consolidated revenue) of approximately 26.3%. Etsy ended the first quarter with $997.2 million in cash and cash equivalents and short- and long-term investments. Under Etsy's stock repurchase program, during the first quarter of 2025 Etsy repurchased an aggregate of approximately $189 million, or 3.7 million shares, of its common stock. These shares were purchased pursuant to a 10b5-1 plan.
