Stocks continued to demonstrate their overall lack of direction on Thursday, as investors failed to build on positive momentum following huge gains in the markets after the Federal Reserve's interest rate decision on Wednesday. As of noon ET, the Nasdaq Composite (^IXIC +1.52%) had given back all its gains from the previous day and then some, falling nearly 5%.
The challenge investors face is that just as the broader markets are up one day and down the next, individual stocks are encountering very different business conditions in their respective industries. That was evident Thursday from the reactions that Booking Holdings (BKNG +4.04%) and Etsy (ETSY +3.84%) had following the release of their respective quarterly results. Below, we'll look more closely at the two companies to see why their reactions were so different.
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Booking Holdings heads to the skies
Shares of Booking Holdings were up almost 5% at midday on Thursday after having been up much more sharply earlier in the session. The online travel platform provider saw encouraging results, and investors looked forward to what could be a pivotal summer season for the entire industry.
Booking's latest financial results showed a massive rebound from extremely difficult conditions in the year-earlier quarter. Gross travel bookings soared nearly 130% year over year to $27.3 billion in the first quarter of 2022, with the number of room nights booked on the platform doubling from the prior-year quarter. Total revenue jumped 136% to $2.7 billion, and Booking reversed a year-ago loss with adjusted net income of $161 million.
NASDAQ: BKNG
Key Data Points
Moreover, Booking is optimistic that the summer season will be even better. As CEO Glenn Fogel explained, global travel trends have continued to improve so far in the second quarter, even with the uncertainties of the Russian invasion of Ukraine, rising inflation across the globe, and ongoing challenges from the COVID-19 pandemic.
Booking Holdings' stock is clearly anticipating the favorable conditions it sees in the near future, because some of its metrics still remain below their levels from before the pandemic hit. In the long run, investors might want to be careful to see pent-up demand as potentially not being sustainable. For now, though, bullish investors are pleased to see Booking's business rebounding so sharply.
Etsy faces challenges
Meanwhile, shares of Etsy were down more than 16%. The online marketplace for craft and handmade goods reported solid first-quarter results, but investors weren't entirely reassured with its forecast and the pace of growth it implied.
Etsy faced some challenges in its first-quarter numbers. Gross merchandise sales (GMS) across all of the company's properties climbed 3.5% year over year to $3.3 billion, but the namesake Etsy marketplace's GMS was down 2% to $2.8 billion. Those comparisons were extremely difficult given the huge growth that Etsy posted during the pandemic, and the company stressed that Etsy's GMS was up 177% from where it was three years ago. Revenue climbed 5% to $579 million as take rates came in at nearly 18%, but net income dropped 40% to $86 million.
NYSE: ETSY
Key Data Points
User metrics showed mixed performance. Active seller counts soared 63% to 7.65 million, as more people looked to take advantage of the platform for business purposes. However, active buyer counts were up just 5% to 95.1 million.
Etsy's second-quarter guidance called for GMS of $2.9 billion to $3.2 billion and revenue of $540 million to $590 million, which implies a standstill in growth. That's reasonable after experiencing such strong tailwinds in recent years, but it still didn't seem to satisfy the short-term desires of shareholders.
