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Etsy (ETSY) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Etsy (ETSY - Free Report) closed at $139.58, marking a +1.45% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 0.02%, and the Nasdaq, a tech-heavy index, added 9.7%.

Prior to today's trading, shares of the online crafts marketplace had gained 21.15% over the past month. This has outpaced the Computer and Technology sector's gain of 11.44% and the S&P 500's gain of 6.27% in that time.

Etsy will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.81, down 27.03% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $749.82 million, up 4.56% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Etsy. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.27% lower within the past month. Etsy is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Etsy has a Forward P/E ratio of 49.18 right now. This represents a premium compared to its industry's average Forward P/E of 24.57.

Meanwhile, ETSY's PEG ratio is currently 5.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 1.79 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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