Etsy's (ETSY) internal initiatives, led by personalization, are driving a growing share of gross merchandise sales growth, although Q3 gains were still driven more by spending per buyer than purchase frequency, Wedbush Securities said Thursday in a note.
Etsy's Q3 diluted EPS of $1 and revenue of $692 million beat Wedbush estimates of $0.86 and $669 million, respectively, as well as Street estimates of $0.77 and $667 million.
Q4 guidance also exceeded expectations, with gross merchandise sales guidance of $3.46 billion to $3.52 billion nearly 2% above Wedbush and Street estimates at the midpoint, while full-year GMS growth guidance rose to about 7% from the mid-single-digit range, according to the note.
Although the Q4 guidance implies a step-down, Wedbush believes management has guided conservatively this year, with Q4 facing tougher comparisons that will become increasingly difficult through the second half of 2027, the note added.
The investment firm now expects Q4 revenue of $900 million, core gross merchandise sales of $3.52 billion, and diluted EPS of $1.45. For full-year 2026, the firm expects diluted EPS of $8.82.
Wedbush kept a neutral rating on Etsy and raised its price target to $99 from $88.
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