Etsy Shares Drop As Needham Downgrades Stock Citing Near-Term Risks

Needham analyst Anna Andreeva downgraded Etsy, Inc ETSY from Buy to Hold.
While shares have lagged and some near-term volatility is arguably in the stock, she views the discretionary nature of the ETSY model as increasingly at risk in the near term.
While visibility is low, she thought that consensus GMS and Sales estimates could be optimistic for 2H22 and especially for '23.
She noted that elevated inventories across retail could make Etsy's value proposition less compelling.
Longer-term, she still views ETSY as unique with a significant opportunity to drive frequency for buyers and sellers.
Andreeva cut her '22/'23 GMS estimates below consensus; with no additional tax attributes remaining, the effective tax rate could swing to 15%-17% in '23.
She estimates a $0.35 headwind to '23 EPS.
Price Action: ETSY shares traded lower by 3.49% at $80.70 in the premarket on the last check Monday.
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