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Etsy (ETSY) Gains But Lags Market: What You Should Know

Etsy (ETSY) closed at $213.75 in the latest trading session, marking a +0.29% move from the prior day. The stock lagged the S&P 500's daily gain of 0.3%.

Prior to today's trading, shares of the online crafts marketplace had lost 0.55% over the past month. This has was narrower than the Computer and Technology sector's loss of 5.35% and the S&P 500's loss of 2.37% in that time.

ETSY will be looking to display strength as it nears its next earnings release. On that day, ETSY is projected to report earnings of $0.50 per share, which would represent a year-over-year decline of 28.57%. Our most recent consensus estimate is calling for quarterly revenue of $517.94 million, up 14.72% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.95 per share and revenue of $2.28 billion, which would represent changes of +9.67% and +31.84%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ETSY. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 0.34% higher. ETSY is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note ETSY's current valuation metrics, including its Forward P/E ratio of 72.22. Its industry sports an average Forward P/E of 26.82, so we one might conclude that ETSY is trading at a premium comparatively.

Also, we should mention that ETSY has a PEG ratio of 3.67. 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. ETSY's industry had an average PEG ratio of 4.03 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 38% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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