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

·3 min read

Etsy (ETSY) closed at $110.42 in the latest trading session, marking a +1.96% move from the prior day. This move outpaced the S&P 500's daily gain of 1.53%. At the same time, the Dow added 1.19%, and the tech-heavy Nasdaq gained 0.14%.

Coming into today, shares of the online crafts marketplace had lost 5.56% in the past month. In that same time, the Computer and Technology sector lost 7.62%, while the S&P 500 lost 3.1%.

Wall Street will be looking for positivity from Etsy as it approaches its next earnings report date. In that report, analysts expect Etsy to post earnings of $0.37 per share. This would mark a year-over-year decline of 40.32%. Meanwhile, our latest consensus estimate is calling for revenue of $560.44 million, up 5.26% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.18 per share and revenue of $2.47 billion. These totals would mark changes of -35.88% and +6.02%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Etsy. Recent revisions tend to reflect the latest near-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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 0.48% lower. Etsy currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Etsy is currently trading at a Forward P/E ratio of 49.76. For comparison, its industry has an average Forward P/E of 20.9, which means Etsy is trading at a premium to the group.

It is also worth noting that ETSY currently has a PEG ratio of 5.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 1.77 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 91, which puts it in the top 37% 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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