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Etsy (ETSY) Dips More Than Broader Markets: What You Should Know

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·3 min read
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  • ETSY
  • ^GSPC

In the latest trading session, Etsy (ETSY) closed at $243.89, marking a -1.47% move from the previous day. This change lagged the S&P 500's 0.51% loss on the day.

Coming into today, shares of the online crafts marketplace had gained 16.56% in the past month. In that same time, the Computer and Technology sector lost 1.72%, while the S&P 500 gained 3.08%.

Investors will be hoping for strength from ETSY as it approaches its next earnings release, which is expected to be November 3, 2021. The company is expected to report EPS of $0.50, down 28.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $518.51 million, up 14.85% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.95 per share and revenue of $2.28 billion, which would represent changes of +9.67% and +31.84%, respectively, from the prior 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 a result, we can interpret positive estimate revisions as a good sign for 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ETSY is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that ETSY has a Forward P/E ratio of 83.86 right now. This represents a premium compared to its industry's average Forward P/E of 27.39.

Meanwhile, ETSY's PEG ratio is currently 4.26. 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 was holding an average PEG ratio of 4.26 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% 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.

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

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