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

Zacks Equity Research

In the latest trading session, Etsy (ETSY) closed at $45.01, marking a -1.69% move from the previous day. This change lagged the S&P 500's daily gain of 0.49%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.67%.

Coming into today, shares of the online crafts marketplace had gained 13.01% in the past month. In that same time, the Computer and Technology sector gained 5.11%, while the S&P 500 gained 3.03%.

Wall Street will be looking for positivity from ETSY as it approaches its next earnings report date. On that day, ETSY is projected to report earnings of $0.17 per share, which would represent a year-over-year decline of 46.88%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $264.97 million, up 32.47% from the year-ago period.

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

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 0.25% higher. ETSY currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that ETSY has a Forward P/E ratio of 57.49 right now. Its industry sports an average Forward P/E of 28.28, so we one might conclude that ETSY is trading at a premium comparatively.

We can also see that ETSY currently has a PEG ratio of 2.8. 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 2.54 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 34% 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.

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


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