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

Zacks Equity Research
·3 min read

Etsy (ETSY) closed the most recent trading day at $207.03, moving +0.92% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.23%. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq added 0.43%.

Coming into today, shares of the online crafts marketplace had gained 15.38% in the past month. In that same time, the Computer and Technology sector gained 4.19%, while the S&P 500 gained 3.86%.

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 $0.57 per share. This would mark year-over-year growth of 128%. Meanwhile, our latest consensus estimate is calling for revenue of $513.25 million, up 90.09% from the prior-year quarter.

Any recent changes to analyst estimates for ETSY should also be noted by investors. 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.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% lower. ETSY is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, ETSY is holding a Forward P/E ratio of 103.5. This valuation marks a premium compared to its industry's average Forward P/E of 31.15.

Investors should also note that ETSY has a PEG ratio of 3.55 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 1.84 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 128, putting it in the top 50% 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.

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


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