Etsy, Fitbit and GoPro aim to stage an earnings comeback this week

Fitbit Charge 2
Source: Fitbit
Fitbit Charge 2

Third quarter earnings season is more than half complete and it appears as though the profit and revenue recessions that dragged down growth are coming to an end.

It started a few weeks ago with a string of strong reports from the financial sector and has continued into the parade of tech earnings. This week's reports from the remainder of the technology sector aim to maintain the positive momentum created from the ongoing earnings recovery.

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A host of these names made the leap from private to publicly listed companies in the past two years and are only now making headway at reigniting growth. They include Etsy's third quarter report Tuesday afternoon, Fitbit on Wednesday and GoPro Thursday after the bell.

Year-to-date stock price change


Etsy has been the most successful of the group. It made significant progress in almost every facet of its business. Shares are up roughly 60 percent in 2016 on a slew of analyst upgrades and strong quarterly results. In the second quarter the company fell back into its old ways by posting a loss but managed to bury those concerns with surging gross merchandise sales and raising guidance.

The Brooklyn-based retailer is firmly establishing itself as the preeminent marketplace for handcrafted items. More than 90 percent of its traffic is organic, meaning Etsy doesn't pay for it and consumers are aware of its value.

Etsy recently acquired machine learning technology company, Blackbird Technologies, in an effort to improve its search capabilities and enhance the buyer experience. With more than 40 million listings on its site and 26 million active buyers, any improvements to the platform are likely to translate to greater engagement and traffic trends.

Expectations are trending higher leading into Etsy's report tomorrow afternoon. Analysts at Estimize are calling for a 2 cent loss per share, 88 percent higher than the same period last year. That forecast has increased 56 percent since the company raised guidance following its second quarter report. Revenue for the period is projected to jump 36 percent to 90.2 million, marking double-digit gains in each of its publicly reported quarters.


Fitbit, like Etsy, has been trending higher leading up to its report. The wearables device maker has started to gain significant traction following strong consumer responses to its two new wearable products: Fitbit Blaze and Alta.

The two models accounted for 54 percent of the 5.7 million devices sold in the second quarter and added $3 to average revenue per device. Its most recent devices, the Charge 2 and Flex 2, are expected to do the same for the third quarter. The two products have attracted positive reviews and will be the backbone of this pivotal report before the holiday season.

The company is still expected see pressure on the bottom line from increased spend on research and development along with marketing campaigns to support top line growth. However, margins and profitability are still expected to show signs of improvement from previous quarters.

Analysts are calling for 17 percent decline on the bottom line for the third quarter to 20 cents per share, according to the Estimize consensus data. That estimate has edged higher by 12 percent in the past 3 months when Fitbit last reported. Revenue for the quarter is expected to increase 25 percent to $509.32 million. Shares are trading lower ahead of its report and historically continue to do so in the days and months following.


GoPro is the last report of the group and has the lowest expectations of making a pronounced turnaround.

The action camera maker has had its share of ups and downs since its 2014 IPO, with the downs mostly driven by mounting losses and decelerating revenue growth. Its product lineup was largely to blame for its woes, but investors were recently given reasons to be hopeful heading into the holiday season.

At a September event, GoPro announced the next iteration of its Hero line and its very first drone, the Karma. The Hero 5 hit shelves soon after the event while consumers are still waiting for the Karma drone's highly anticipated debut. Regardless, both products have been well received and even contributed to a slew of stock upgrades. Shares are virtually flat in the past 6 months after suffering significant losses earlier in the year.

Analysts are calling for a 33 cent loss per share this quarter on $306.36 million in revenue, according to the Estimize consensus data. Compared to a year earlier that represents a 231 percent decline on the bottom line and 23 percent on the top. Third quarter results aren't likely to clean up past missteps, but will more importantly shed light on sales expectations for the Karma drone and Hero 5.


How do you think these names will report? Be included in the Estimize consensus by contributing your estimates here.