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Etsy (ETSY) Stock Drops Despite Market Gains: Important Facts to Note

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Etsy (ETSY - Free Report) closed at $64.98 in the latest trading session, marking a -0.88% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 1.11% for the day. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.

The online crafts marketplace's shares have seen a decrease of 4.15% over the last month, not keeping up with the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 0.48%.

Analysts and investors alike will be keeping a close eye on the performance of Etsy in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.49, reflecting a 7.55% decrease from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $647.95 million, indicating a 1.1% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.60 per share and revenue of $2.86 billion, which would represent changes of +7.44% and +4.04%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Etsy. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.61% lower. Etsy is currently sporting a Zacks Rank of #3 (Hold).

Looking at valuation, Etsy is presently trading at a Forward P/E ratio of 25.25. This represents a premium compared to its industry's average Forward P/E of 23.16.

One should further note that ETSY currently holds a PEG ratio of 4.53. 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. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.81.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 63, this industry ranks in the top 25% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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.

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


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