Why Etsy, Inc. (ETSY) Plummeted on Wednesday

We recently compiled a list of the 10 Stocks Plummet on Wednesday. In this article, we are going to take a look at where Etsy, Inc. (NASDAQ:ETSY) stands against the other stocks.

The stock market ended firmer on Wednesday, with all major indices finishing in the green territory as investors weighed news of President Donald Trump’s imposition of a new round of tariffs while digesting minutes of the Federal Reserve.

The Dow Jones rose by 0.16 percent, the S&P 500 increased by 0.24 percent, while the tech-heavy Nasdaq eked out a 0.07 percent gain.

Ten companies bucked a broader market optimism, posting heavy losses, mostly due to disappointing earnings performance last year.

To come up with Wednesday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A young woman shopping for a vintage fashion item online.

Etsy, Inc. (NASDAQ:ETSY)

Shares of Etsy, Inc. (NASDAQ:ETSY) declined by 10.05 percent on Wednesday to finish at $51.53 apiece as investors sold off positions following lower gross merchandise sales (GMS) and number of active buyers for the fourth quarter of 2024.

In its earnings release, Etsy, Inc. (NASDAQ:ETSY) said consolidated GMS declined by 6.8 percent to $3.7 billion, while GMS from its marketplace dropped 8.6 percent to $3.3 billion as a result of pressures on consumer discretionary product spending, challenging year-over-year comparisons in a shortened holiday season, category mix, and a highly promotional and competitive retail environment.

In particular, Etsy, Inc. (NASDAQ:ETSY) marketplace GMS was weak on a year-on-year basis in October and November but saw a notable pickup in December.

The number of active buyers also dropped 2.6 percent year-on-year, while the active seller count decreased 10 percent year-on-year.

Net income increased by 56 percent during the period at $129.9 million from $83 million year-on-year, while revenues inched up by 1.2 percent to $852 million from $842 million.

Overall ETSY ranks 9th on our list of the stocks that plummeted on Wednesday. While we acknowledge the potential of ETSY as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ETSY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.