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Etsy (ETSY) Suffers a Larger Drop Than the General Market: Key Insights

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Etsy (ETSY - Free Report) closed at $67.49 in the latest trading session, marking a -1.27% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.58% for the day. Elsewhere, the Dow saw a downswing of 0.12%, while the tech-heavy Nasdaq depreciated by 1.15%.

Shares of the online crafts marketplace have appreciated by 2.27% over the course of the past month, outperforming the Computer and Technology sector's loss of 0.47% and the S&P 500's loss of 1.09%.

Analysts and investors alike will be keeping a close eye on the performance of Etsy in its upcoming earnings disclosure. On that day, Etsy is projected to report earnings of $0.49 per share, which would represent a year-over-year decline of 7.55%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $647.74 million, up 1.07% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.57 per share and a revenue of $2.85 billion, indicating changes of +6.2% and +3.87%, respectively, from the former year.

Any recent changes to analyst estimates for Etsy should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.7% lower. As of now, Etsy holds a Zacks Rank of #3 (Hold).

With respect to valuation, Etsy is currently being traded at a Forward P/E ratio of 26.61. This indicates a premium in contrast to its industry's Forward P/E of 23.01.

It's also important to note that ETSY currently trades at a PEG ratio of 4.77. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Services industry was having an average PEG ratio of 1.76.

The Internet - Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 45, finds itself in the top 18% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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 use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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