Etsy (NASDAQ:ETSY) stock is falling on Thursday after the e-commerce company’s shares were hit with a double downgrade.
Jefferies analyst John Colantuoni is behind today’s downgrade for ETSY stock. The analysts dropped the company from a “buy” rating to an “underperform” rating, completely skipping past a “hold” rating. To put that in perspective, the analysts’ consensus for ETSY shares is “moderate-buy” based on 24 opinions.
To go along with that downgrade, Colantuoni also dropped his price target for ETSY stock. This has the analyst cutting his estimate for ETSY shares from $150 each to $85 each. That represents a potential 25% downside from its prior close. It’s also a bearish price target next to the analysts’ consensus of $130.67 per share.
What’s Behind the ETSY Stock Downgrade?
Here’s what the Jefferies analyst said about ETSY in a note to clients obtained by CNBC:
“With more limited take rate upside and deteriorating buyer trends, we see downside to consensus from slowing top line and moderating margin expansion. We worry a reliance on new buyers could keep churn (and marketing) elevated and pressure spending by reducing the mix of existing buyers with higher stickiness and frequency. Slowing GMS growth and modest margin upside results in downside to consensus.”
ETSY stock is down 4.1% as of Thursday morning.
Investors searching for more of the latest stock market news will want to keep reading!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.