Analysts Bash ETSY With Post-Earnings Bear Notes

Options players were already placing bearish bets on ETSY ahead of earnings

by Lillian Currens

Published on Oct 31, 2019 at 10:19 AM

The shares of online retail giant Etsy Inc (NASDAQ:ETSY) are sinking today, following a mixed third-quarter report. The firm posted earnings of 12 cents per share, which fell in line with the consensus estimate, but came in lower than last year's profits.

And while its $197.9 million in revenue beat expectations, the company also raised its full-year gross merchandise sales (GMS) forecast to account for its Reverb acquisition, and adjusted its EBITDA and revenue guidance. The stock is down 16.6% at $44.08, at last check, its lowest point since last December. 

A major drubbing from the brokerage bunch isn't helping ETSY's case, either. Already, four analysts have issued price-target cuts, including Instinet (to $61), Needham (to $64), Canaccord Genuity (to $80), and KeyBanc (to $78). The consensus 12-month price target of $72 still sits near the equity's early March record high, and 13 of 15 brokerages consider the e-tail name a "buy" or better, suggesting even more bear notes could be on their way, should these losses hold.

While analysts have been generally bullish prior to today's report, options players have been singing a slightly different tune. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), puts have almost doubled calls during the last two weeks. The stock's 10-day put/call volume ratio of 1.99 sits higher than 91% of all other readings from the last year, indicating this rate of put buying relative to call buying is very unusual. 

While the stock did manage to bounce off the $48 region in early September, it's sliced through this short-term level of support in today's trading. ETSY is now on course for its fourth-straight loss. For October, the shares have shed over 21%, and are set to close below their 20-month moving average for the first time since early 2017.


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