Etsy Inc (NASDAQ: ETSY) is having an overwhelmingly strong start to the trading session this morning, pushing toward record highs. The gains are ultimately the result of an announcement surrounding new seller tools, increased transaction fees, and increased guidance. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The update;
- what we’re seeing from the stock as a result;
- and what we’ll be watching for with regard to ETSY ahead.
ETSY Announes Big Changes
As mentioned above, Etsy is having an incredibly strong start to the trading session this morning after announcing enhanced selling tools, increased transaction fees, and improvements in guidance. In a press release issued early this morning, the company announced new optional monthly plans that begin to roll out next month. Also, the company said that it is revising the seller transaction fee, increasing it from 3.5% to 5%. The goal in doing so is to increase revenue that will further support investments in the growth and health of the marketplace.
In the release, ETSY said that it is expecting to see GMS growth in the range between 16% and 10%, revenue growth between 32% and 34% and adjusted EBITDA margins of 21% to 23%. Previously, guidance stood at between 16% and 16%, 22% and 24%, and 21% and 23% respectively. In a statement, Josh Silverman, CEO at ETSY, had the following to offer:
Empowering creative entrepreneurs is at the heart of Etsy’s mission to keep commerce human… Our two million active sellers have individual business goals and aspirations, and we want to support them no matter where they are on their journey. By listening to the needs of our sellers, we designed our new subscription packages with a combination of tools to help them succeed at each phase of their business lifecycle.
The above statement was followed up by Rachel Glaser, CFO at ETSY. Here’s what she had to offer:
Our revised fee structure will allow us to make more meaningful investments on behalf of our sellers while remaining what we believe is the best value for entrepreneurs looking to start, manage, and grow a creative business. We plan to increase our 2017 direct marketing spend by at least 40% in 2018, revamp our Etsy community platforms, and execute against an exciting product roadmap. We believe all of this will help drive near-term growth and increase buyer lifetime value.
What We’re Seeing From The Stock
With news of improved guidance and coming improvements to the Etsy platform, it’s no surprise to see that investors are excited. Of course, excited investors means gains in the stock, and that’s exactly what we’re seeing today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:18), ETSY is trading at $39.25 per share after a gain of $6.26 per share or 18.98% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ETSY. In particular, we’re interested in following the company’s growth following the changes that were announced today. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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