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

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Etsy (ETSY) closed the most recent trading day at $50.37, moving +1.47% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.73%. At the same time, the Dow added 0.6%, and the tech-heavy Nasdaq gained 1.13%.

Coming into today, shares of the online crafts marketplace had gained 6.91% in the past month. In that same time, the Computer and Technology sector gained 5.28%, while the S&P 500 gained 2.95%.

Investors will be hoping for strength from ETSY as it approaches its next earnings release, which is expected to be February 26, 2020. 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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $264.89 million, up 32.42% from the year-ago period.

Investors might also notice recent changes to analyst estimates for ETSY. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, ETSY is currently trading at a Forward P/E ratio of 63.46. For comparison, its industry has an average Forward P/E of 28.07, which means ETSY is trading at a premium to the group.

Meanwhile, ETSY's PEG ratio is currently 3.1. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.09 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% 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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