Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Etsy (ETSY - Free Report) closed at $93.15, marking a +1.8% move from the previous day. This move outpaced the S&P 500's daily gain of 0.85%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 5.61%.

Coming into today, shares of the online crafts marketplace had lost 3.75% in the past month. In that same time, the Computer and Technology sector gained 1.89%, while the S&P 500 gained 3.18%.

Etsy will be looking to display strength as it nears its next earnings release. In that report, analysts expect Etsy to post earnings of $0.41 per share. This would mark a year-over-year decline of 19.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $620.73 million, up 6.08% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.33 per share and revenue of $2.76 billion, which would represent changes of -14.34% and +7.52%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Etsy. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.66% lower. Etsy is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note Etsy's current valuation metrics, including its Forward P/E ratio of 39.2. For comparison, its industry has an average Forward P/E of 31, which means Etsy is trading at a premium to the group.

Also, we should mention that ETSY has a PEG ratio of 5.55. 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. ETSY's industry had an average PEG ratio of 1.57 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 72, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Etsy, Inc. (ETSY) - free report >>

Published in