Why Etsy, Inc. stock fell 17.2% in October – The Fool Motley

What happened

Actions of Etsy, Inc. (NASDAQ: ETSY) 17.2% in October, according to data provided by S & P Global Market Intelligence. The e-commerce stock posted its biggest drop in 2018 last month, but there seems to be no news specific to a company behind sales.

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In October, major US indexes recorded their largest percentage contraction since February 2009, and the Etsy share tended to weaken in line with the broader market. The company has performed strongly in terms of earnings and platform innovations this year, but remains a growth-driven technology company – and shares in this category tend to be more affected than other markets during the year. folds.

So what

October may have been a little scary for Etsy's shareholders, but they did not wait long to get a break. The company released its third quarter results after the market closed on November 6, generating impressive growth and better than expected market results.

Sales for the period were up 41% over the prior year, reaching approximately $ 150.4 million, which corresponds to the average estimate of analysts. Gross merchandise sales on the platform also grew strongly, up 21% from the previous year to $ 922.5 million. Revenue growth has significantly outpaced GMS growth due to higher service prices implemented by the company. Non-GAAP Adjusted EBITDA increased by 49.5% to $ 34 million and GAAP net earnings of $ 0.15 were significantly higher than the Analyst's analysis of earnings per share $ 0.07.

Now what

Etsy's action rebounded after the third quarter results and positive market developments. Shares have risen from about 17.7% in November to the present.

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The company has raised its guidance for the full year as a result of its strong third quarter performance. It now expects annual sales growth of 35% to 36% (versus 33% to 35%) to reach sales of approximately $ 598 million. Adjusted EBITDA is now expected to be in the range of $ 132 million to $ 138 million, up from the previous target of EBITDA of $ 124 million to $ 136 million.

Keith Noonan does not own any of the shares mentioned. The Motley Fool owns shares and recommends Etsy. Motley Fool has a disclosure policy.