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

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Etsy (ETSY - Free Report) closed the most recent trading day at $41.29, moving +1.92% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.15%. At the same time, the Dow added 2.39%, and the tech-heavy Nasdaq lost 0.45%.

Prior to today's trading, shares of the online crafts marketplace had lost 23.57% over the past month. This has lagged the Computer and Technology sector's loss of 18.62% and was narrower than the S&P 500's loss of 24.07% in that time.

Wall Street will be looking for positivity from ETSY as it approaches its next earnings report date. The company is expected to report EPS of $0.18, down 25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $225.17 million, up 32.97% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.72 per share and revenue of $1.05 billion. These totals would mark changes of -5.26% and +27.71%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ETSY. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate has moved 8.32% lower within the past month. ETSY currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ETSY has a Forward P/E ratio of 52.87 right now. This represents a premium compared to its industry's average Forward P/E of 26.17.

We can also see that ETSY currently has a PEG ratio of 2.47. 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. ETSY's industry had an average PEG ratio of 1.53 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow ETSY in the coming trading sessions, be sure to utilize Zacks.com.


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