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Etsy (ETSY) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Etsy (ETSY - Free Report) closed at $220.82, marking a -0.71% move from the previous day. This change lagged the S&P 500's 0.44% loss on the day. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.72%.

Prior to today's trading, shares of the online crafts marketplace had gained 3.17% over the past month. This has lagged the Computer and Technology sector's gain of 10.21% and the S&P 500's gain of 4.46% in that time.

Wall Street will be looking for positivity from ETSY as it approaches its next earnings report date. This is expected to be February 25, 2021. In that report, analysts expect ETSY to post earnings of $0.58 per share. This would mark year-over-year growth of 132%. Meanwhile, our latest consensus estimate is calling for revenue of $514.72 million, up 90.64% from the prior-year quarter.

Any recent changes to analyst estimates for ETSY should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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.

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. The Zacks Consensus EPS estimate has moved 2.45% lower within the past month. ETSY is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ETSY's current valuation metrics, including its Forward P/E ratio of 117.36. Its industry sports an average Forward P/E of 34.87, so we one might conclude that ETSY is trading at a premium comparatively.

Meanwhile, ETSY's PEG ratio is currently 4.02. 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 industry currently had an average PEG ratio of 3.78 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 162, which puts it in the bottom 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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