This is the week that Etsy (ETSY -2.62%) will drop its latest earnings release -- specifically, on Wednesday after market hours -- and judging by Monday's action, investors aren't filled with confidence about it. The company's shares fell by over 4% on the day, a notably deeper plunge than the 0.8% decline of the S&P 500 index.
That lack of confidence broadly mirrors the outlook of analysts tracking Etsy stock. While they are a mix of bears and bulls, on average, they are forecasting that the company's generally accepted accounting principles (GAAP) per-share net profit will land at $0.37 in the third quarter. That's well down from the $0.62 it posted in the same quarter of 2021.
On the other hand, revenue is expected to come in higher, at more than $564 million. Yet if achieved, that would represent growth of only 6%. By contrast, in Etsy's second quarter, the company managed to boost its revenue by nearly 11% on a year-over-year basis.
Some of the gloominess around Etsy stock has to do with macroeconomic concerns. Inflation continues to bite and shows little sign of easing. Many consumers are pulling back on spending, and many of the wares offered through the site are hardly essential items for survival.
Yet those concerns might be a bit overblown, and consumers may be more resilient than many assume. Additionally, Etsy still has a strong position in its rather specialized niche, and its site remains a top destination for those interested in crafts and collections. It's very possible investors are currently underestimating the company's strength and potential at the moment.