Etsy Stock Eyes Worst Day Since 2020 After Earnings

A weak current-quarter outlook is weighing on shares

Digital Content Manager
May 5, 2022 at 10:07 AM
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The shares of Etsy Inc (NASDAQ:ETSY) are plummeting this morning, last seen down 17.9% at $89.81, as investors go over the online retailer's latest earnings release. While the company reported earnings of 60 cents per share, which met analysts' expectations, and saw better-than-expected revenue of $579.3 million for the first quarter, its current-quarter revenue guidance missed estimates. Etsy said a drop in disposable income for customers dinged its outlook.

Several analysts have already chimed in, with no less than six price-target cuts dished out so far. The lowest came from Morgan Stanley, which lowered its price target to $113 from $154. The 12-month consensus price target now sits at $162.26, which is a 78.3% premium to last night's close. A closer look shows a mostly optimistic brokerage bunch, with 11 of the 16 in coverage calling the stock a "buy" or better, while five said "hold."

The security is set to snap a three-day win streak, should these losses hold. Today's plummet also puts it at fresh two-year lows. ETSY is looking to add to its dismal 58.5% year-to-date deficit, and its headed for its biggest single-day drop since November 2020.

Options bears are likely cheering today, as there's been a heavy shift towards puts in recent weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day put/call volume ratio of 1.55, which sits higher than all but 2% of readings from the past year. In other words, there's been a much healthier-than-usual appetite for long puts during the past 10 weeks. 

Drilling down to today's options activity, 12,000 calls and 12,000 puts have exchanged hands, or eight times the intraday average. Most popular are the 5/6 54- and 63-strike calls, with positions being opened at the former.


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