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

Zacks Equity Research

Etsy (ETSY) closed at $54.18 in the latest trading session, marking a -1.99% move from the prior day. This move lagged the S&P 500's daily gain of 0.18%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.03%.

Coming into today, shares of the online crafts marketplace had gained 3.25% in the past month. In that same time, the Computer and Technology sector gained 5.62%, while the S&P 500 gained 4.28%.

Wall Street will be looking for positivity from ETSY as it approaches its next earnings report date. This is expected to be February 25, 2019. In that report, analysts expect ETSY to post earnings of $0.31 per share. This would mark year-over-year growth of 106.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $194.88 million, up 43.01% from the year-ago period.

Investors should also note any recent changes to analyst estimates for ETSY. These revisions help to show the ever-changing nature of near-term business trends. 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.

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 remained stagnant. ETSY is currently a Zacks Rank #2 (Buy).

Investors should also note ETSY's current valuation metrics, including its Forward P/E ratio of 52.85. For comparison, its industry has an average Forward P/E of 29.05, which means ETSY is trading at a premium to the group.

It is also worth noting that ETSY currently has a PEG ratio of 3.52. 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 2.94 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 105, putting it in the top 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.

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


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