Etsy (ETSY.US) stock trades 4.0% lower on Thursday after Jefferies double-downgraded the on the online crafts marketplace to "underperform" from "buy" completely skipping past a “hold” rating.
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Analysts cited slowing consumer spending and the need to increase marketing costs as buyer churn increases.
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Price target has been lowered from $150 each to $85 each. That represents a potential 25% downside from its prior close.
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“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”, Jefferies analyst John Colantuoni told CNBC.
Etsy (ETSY.US) stock launched today's session sharply lower, however sellers failed to break below key support at $108.00 which is marked with lower limit of the 1:1 structure, upward trendline and 200 SMA (red line). As long as price sits above the aforementioned level, another upward impulse towards resistance at $137.20 may be launched. On the other hand, should break lower occur, recent sell-off may deepen towards $90.75, where 78.6% Fibonacci retracement of the upward wave launched in March 2020 can be found. Source: xStation5
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