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

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Etsy (ETSY - Free Report) closed at $49.83 in the latest trading session, marking a +1.03% move from the prior day. This change outpaced the S&P 500's 1.01% gain on the day. Meanwhile, the Dow gained 0.66%, and the Nasdaq, a tech-heavy index, added 1.43%.

Heading into today, shares of the online crafts marketplace had gained 10.91% over the past month, outpacing the Computer and Technology sector's gain of 2.89% and the S&P 500's gain of 0.19% in that time.

Investors will be hoping for strength from ETSY as it approaches its next earnings release. On that day, ETSY is projected to report earnings of $0.17 per share, which would represent a year-over-year decline of 46.88%. Our most recent consensus estimate is calling for quarterly revenue of $264.97 million, up 32.47% from the year-ago period.

Investors should also note any 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 0.16% higher. ETSY is currently a Zacks Rank #4 (Sell).

Looking at its valuation, ETSY is holding a Forward P/E ratio of 61.84. This valuation marks a premium compared to its industry's average Forward P/E of 26.75.

Investors should also note that ETSY has a PEG ratio of 3.02 right now. 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. The Internet - Services industry currently had an average PEG ratio of 2.1 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 171, putting it in the bottom 33% 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.


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