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Etsy (ETSY) Gains As Market Dips: What You Should Know

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Etsy (ETSY) closed at $202.94 in the latest trading session, marking a +1.73% move from the prior day. This change outpaced the S&P 500's 0.02% loss on the day.

Prior to today's trading, shares of the online crafts marketplace had lost 1.51% over the past month. This has lagged the Computer and Technology sector's gain of 2.65% and the S&P 500's gain of 2.91% in that time.

ETSY will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2021. On that day, ETSY is projected to report earnings of $0.59 per share, which would represent a year-over-year decline of 21.33%. Meanwhile, our latest consensus estimate is calling for revenue of $531.78 million, up 24.03% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.94 per share and revenue of $2.28 billion, which would represent changes of +9.29% and +32.17%, respectively, from the prior year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.21% lower within the past month. ETSY is currently a Zacks Rank #3 (Hold).

In terms of valuation, ETSY is currently trading at a Forward P/E ratio of 67.88. Its industry sports an average Forward P/E of 29.37, so we one might conclude that ETSY is trading at a premium comparatively.

Meanwhile, ETSY's PEG ratio is currently 3.5. 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 2.65 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 29% 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.

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


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